After intense opposition from the state’s religious schools, the author of a controversial bill that would have exposed private religious colleges in California to anti-discrimination lawsuits has agreed to remove a key provision.

Pushed by gay rights organizations, Senate Bill 1146 would have required religious schools receiving state money – including those that enroll students with Cal Grant scholarships – to comply with California’s anti-discrimination laws or risk private lawsuits.

In order to comply with the law, schools could have had to provide housing for same-sex married couples and allow students to use bathrooms based on their gender identity, something they said was a nonstarter because it violated religious beliefs.

The Association of Faith-Based Institutions, formed a little more than two weeks ago, had raised $350,000 from religious schools to fight the bill.

But on Wednesday, Sen. Ricardo Lara, D-Bell Gardens, removed the provision that would have allowed students to sue if they felt they had been discriminated against. Now the bill requires the schools to publicly disclose their exempt status from non-discrimination laws so prospective students are aware of the rules. The amended bill also requires colleges to notify the state Student Aid Commission, which oversees Cal Grants, each time a student is expelled for violating a school’s moral code of conduct.

“With SB 1146, we shed light on the appalling discriminatory practices LGBT students face at private religious universities in California,” Lara said in a statement. “These provisions represent critical first steps in the ongoing efforts to protect students from discrimination for living their truths or loving openly.”

The schools have said they are not opposed to the new provisions of the bill, and religious groups cheered the decision.

“Without a doubt, the unmodified version would have jeopardized Christian institutions and egregiously penalized all students of faith, especially Latino and African-American individuals,” the Rev. Samuel Rodriguez, president of National Hispanic Christian Leadership Conference said in a statement.

Cal Grants were a key issue in the debate over the bill. Students can use the money, which is awarded based on financial need and academic merit, at any state school and some independent schools. To attend a private four-year college, eligible students can get up to $9,084 from the state each year.