The House voted 95-0 Monday to approve the measure. It returns now to the Senate to approve changes.
No campuses in Indiana have declared themselves sanctuaries, but several have faced pressure from students and faculty.
A lawmaker questions how a bill that reaffirms students' right to pray aloud in public schools would treat non-Christian religions.
Then-Governor Mike Pence approved the project as part of the state’s bicentennial celebrations.
Under the plan, K-12 education funding would be increased by 1.1 percent in the first year, and 1.7 percent in the second year, or a total of $273 million.
At least one lawmaker says he voted for Sen. Brandt Hershman's measure in committee based partly on the inaccurate information.
Could more prayer in school be a cure for societal ills?
Lawmakers could do away with requiring small wineries and breweries to have barriers separating children from the area where alcohol is served.
The bill would give executive boards of health at both state and local levels the power to adopt rules and ordinances over pest control policies.
An amendment to the bill replaced references to "hemp oil" with cannabidiol.