Gov. Mike Pence says the bill that revises the state's criminal code is too lenient with low-level offenders.
Some criminals receive social or drug rehabilitation services in county jails, but many others are referred to outside facilities during their incarceration.
The Indiana Senate is considering this week legislation overhauling the state's criminal code after the House passed the bill.
At the Statehouse, the House passed a budget and a bill overhauling the state's criminal code. The Senate passed legislation regulating drug-induced abortions.
The legislation requires offenders to serve more jail time but also reduces penalties for lower-level felonies.
The bill passed unanimously but is expected to face greater obstacles when it is heard on the House floor.
A study committee approved Wednesday the recommendations it is making to the legislature regarding an overhaul of the state's criminal code.