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PHOENIX — State lawmakers are returning to an old favorite incentive to convince companies to test their workers for drugs and alcohol: money.

Legislation approved by the House of Representatives would allow insurance companies that provide workers' compensation coverage to give policyholders a 5 percent discount if they have drug-testing programs. The measure, which already has been approved by one Senate panel, awaits a full Senate vote.

The state would allow the discount because it is the state that actually sets the insurance company's rates on workers' comp.

That 5 percent discount is what insurers also offered after lawmakers approved a measure in 1999 spelling out that companies with drug-testing practices that complied with federal law would not be liable for payments if a worker who tested positive were injured on the job.

The proposal, HB 2405, is a direct reaction to the inability of companies to block workers' compensation benefits to injured employees who test positive for drugs or alcohol.

Workers' compensation in Arizona is a no-fault system. Employees injured on the job are entitled to have their medical bills paid and a percentage of their salary, regardless of who caused the mishap.

In exchange for guaranteed compensation, the workers give up the right to sue the employer for negligence. Most companies buy insurance coverage, though some larger firms are self-insured.

A 1999 state law says that if a company has a drug-testing policy, an injured worker can be denied benefits for failing a drug test or refusing to take one.

But two years ago the state Supreme Court ruled that law unconstitutional. The justices said the workers' compensation system — and the no-fault provision — is part of the state constitution and lawmakers are powerless to alter that.

Last session, legislators flirted with the idea of asking voters to amend the constitution to create the exception. But Sen. Barbara Leff, R-Paradise Valley, who chairs the Senate Commerce and Economic Development Committee, said that might have created a whole new set of problems as injured workers, no longer eligible for workers' comp benefits, then would be free to sue their employers.

Rep. Michele Reagan, Leff's House counterpart, agreed.

"We decided to go the other way," she said, providing an incentive.

Reagan, a Republican, said legislation permitting a discount is needed because of the way workers' compensation insurance is regulated.

Michelle Bolton, state director of the National Federation of Independent Business, said a 5 percent discount will convince more companies that it makes sense to test their workers. She said it can be expensive for companies to set up testing programs.

Not just any drug-testing program would qualify for the discount. First, it would require the policy be in writing and that the circumstances under which someone might be tested spelled out. At the very least, the policy would require testing all prospective employees as well as all those who are injured while on the job.

And the employer's insurance company would have to have access to the drug test results. The policy also would have to be applied uniformly to everyone, including officers, directors and supervisors.

Companies could — but would not be required to — conduct random drug tests. .