Republican Sen. Mike Delph told The Indianapolis Star he plans to file the bill next week when the 2008 session begins. The measure already is being criticized by business owners and Hispanic leaders.

"At every town hall meeting I've been to, doing something about illegal immigration has been the No. 2 question, right behind property taxes," Delph said. "Unfortunately, the federal government has failed in its role to protect the borders, and we've got to deal with it."

Companies found to have hired illegal immigrants would be placed on probation for three years, Delph said. Those who hired illegals while on probation would lose their licenses to do business in Indiana.

A similar measure took effect in Arizona Jan. 1. Business owners there have predicted the state's economy will suffer because companies will not be able to find workers.

The Pew Hispanic Center estimates about 50,000 illegal immigrants out of 12 million believed to be in the country live in Indiana.