Transgender youth in Indiana often do not want to identify with their gender because of a fear of discrimination.
The Bureau of Motor Vehicles is reinstating the gay youth support group's license plate but is barring them from having low-numbered plates.
Earlier this week, the BMV asked for clarification of a ruling ordering the department to reinstate the license plates.
A judge has ruled the Indiana Youth Group did not violate state law by selling specialty license plates.
The Bureau of Motor Vehicles suspended Indiana Youth Group, Indiana Greenways and 4-H Foundation license plates because the groups gave them away to donors.
The Bureau of Motor Vehicles will still have final say in which plates are issued.
Committee members heard two hours of testimony on the issue Wednesday.
The Indiana Youth Group's license plate was banned because they allegedly did not follow BMV procedure.
The BMV says the Indiana Youth Group must go through the courts if it wants to appeal the bureau's decision to ban the organization's license plates.
A handful of the plates have already been sold statewide.