The legislation would reduce mandatory minimums for certain drug offenses and largely ban solitary confinement for juveniles.
Egypt’s Constituent Assembly is in the midst of drafting a new constitution, and the process is causing heated debate.
Last week, thousands of Islamists marched in Cairo, calling for President Mohammed Mursi and the constitution to implement Shariah law. But opponents say the draft is too heavily weighted towards Islam.
The BBC’s Hugh Sykes reports.