The Assembly on Thursday approved SB1010 on a 49-14 vote, returning it to the Senate for a final vote on amendments.
The current punishment for possession for sale of powder cocaine is two to four years, while the same offense for crack cocaine is punishable by three to five years. Bill supporters say white drug users tend to snort cocaine while black and Latino users tend to smoke crack.
The bill would make both punishable by two to four years, ending what Assemblyman Steven Bradford of Gardena calls "blatant racism."
Law enforcement groups and some Republican lawmakers say the penalties for both forms of the drug should be increased instead.
Congress and President Barack Obama agreed in 2010 to reduce federal crack cocaine penalties.