I think universities have a serious "intellectual diversity" problem, but a proposed bill introduced into the Indiana state legislature is not a good approach to trying to address that problem and would create significant academic freedom problems. You can find my take on this problem here.
Indiana Senate Bill 202 is discussed here. The state senator sponsoring the bill is a former aide to Mitch Daniels when Daniels served as the president of Purdue University. He hopes the bill would help change perceptions about American higher education among conservatives, but I'm skeptical that this bill would help much in changing those perceptions and I don't think it would make much progress in addressing the underlying concerns that conservatives have. The text of the bill can be found here.
The bill (ch. 2, sec. 1(b)(1)) directs the regents to develop a policy to block tenure of professors who are "unlikely to foster a culture of free inquiry." I think this is actually quite interesting and raises difficult questions. I'm not enthused about trying to do it through board policy, however. Could universities under this rule hire a professor who subscribed to various postmodern views about free speech or agreed with Marcuse on the need for "repressive tolerance"? Could universities hire professors with various views derived from critical race theory about the need to suppress certain ideas in the public sphere and in the universities specifically? Could universities hire conservative faculty who agree with Christopher Rufo and others about the need to weed out campus radicals and dispense with what they might characterize as luxury disciplines like women's studies? Perhaps not. There are classic problems regarding whether we must tolerate the intolerant, and universities do need to resist being captured by those who are hostile to their core mission of free inquiry and the neutral pursuit of the truth and the advancement of knowledge. But this kind of blanket ban is unlikely to have good effects.