The law is expected to easily win final approval in a second session before the National Assembly next week. It would allow Chavez to enact laws by decree for a period of 1½ years.
The measure was approved unanimously in its first reading after a four-hour discussion by lawmakers, National Assembly President Cilia Flores said.
Earlier this week, Chavez decided that Venezuela's oldest private TV station, Radio Caracas Television, must go off the air for good when its broadcast license expires on May 28.
"Their days are numbered. Squeal, kick, whatever they do: the license of that fascist channel is gone," Chavez said Saturday. "RCTV's signal will be nationalized for Venezuelans."
Emboldened by his sweeping re-election victory, Chavez now seems intent on transforming Venezuela's broadcast media. An expanding web of state-run and state-financed radio and TV stations shapes his image. And almost every Sunday, he preaches socialist ideals on "Hello President," his folksy talk-show program that runs for five hours or more.
RCTV, in contrast, has been a constant irritant to Chavez. Along with a cadre of other private TV channels and newspapers he accuses of spreading disinformation and conspiring against him, he says RCTV produces "poison" through "grotesque shows" that promote consumerism and violence.
Top RCTV executive Marcel Granier insists his channel has done nothing wrong and is being punished for criticizing the government as part of an "autocratic scheme." He argues RCTV has the legal right to keep broadcasting until 2022, and plans to challenge Chavez in court.
RCTV has been one of Venezuela's leading TV networks since 1953, broadcasting a mix of news, talk shows, sports, soap operas and its own version of "Who Wants to Be a Millionaire?"
The weekly program "Radio Rochela," which like "Saturday Night Live" often lampoons politicians, was a Venezuelan institution long before Chavez was first elected in 1998.
For now, the studios still bustle with giggling teenagers seeking autographs from soap stars and comedians practicing poking fun at Chavez for "Radio Rochela." Another recent skit mocked Chavez's mentor, Fidel Castro, with an impersonator dancing and rapping in olive-green fatigues, saying: "Give me more gasoline!"
But the mood has grown somber among RCTV's 2,500 employees.
The station's supporters call Chavez's threat to deny RCTV a new license an example of how freedom of speech will be sacrificed in the "socialist republic of Venezuela" that Chavez proclaimed as he began his third term. Nearly 100 horn-honking cars snaked through Caracas Sunday in one protest caravan, with "Don't Mess With The Media!" scrawled in white shoe polish across their windows.