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Under the proposed law, which would also have to pass in the National Assembly, protesters could be required to pay up to €10,000 for damage caused during demonstrations.
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About 70,000 law enforcement officers were mobilised ahead of Saturday's planned protests after authorities bolstered security following last weekend's riots.
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As France readies itself for another day of nationwide protests, the government's efforts to prevent renewed violence have prompted criticism from some.
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A massive security operation has been deployed across France for major protests on Saturday. Businesses across the country remain tense following violence which overshadowed peaceful demonstrations last weekend.
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Some military forces from Operation Sentinelle will be deployed to free up police and gendarmes for the expected demonstrations, French Interior Minister Laurent Nuñez said.
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