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Lawmakers behind the bill have insisted their goal is to protect the integrity of female athletes and sports competitions.
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If the full Senate approves the bill, which could happen as soon as Thursday, it would head to the governor for consideration. The Indiana House already passed it.
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The bill's author, Rep. Michelle Davis (R-Whiteland), said it's about preserving fairness in girls' sports competitions.
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Some parents and others in support of the legislation said they worry about transgender girls having possible advantages in elite or high-level athletic competitions due to their biological sex.