Several provisions of the 2001 law are set to expire at the end of this year, and President George W Bush has urged Congress to make it permanent.
The House of Representatives passed its version of the legislation earlier this month.
Differences between the two must be reconciled before a final measure can be sent to Bush to sign into law.
“We are confident Congress will ultimately send the president a bill that does not undermine the ability of investigators and prosecutors to disrupt terrorist plots and combat terrorism effectively,” said Justice Department spokeswoman Tasia Scolinos.
Seeking to tighten provisions criticised by civil liberties groups, the Senate bill would require the federal government to report how it uses its authority to view library and medical records, one of the most controversial powers granted by the law.
“Like all compromises, it includes provisions that are not supported by everyone in this body,” said Senate Minority Leader Harry Reid, a Nevada Democrat.
“However, Democratic and Republican members of the Judiciary Committee came together in a spirit of cooperation and compromise to agree on this bill, and I strongly support it,” Reid said.
Search and seize
The Senate bill, passed without opposition, would renew for four years the law enforcement’s ability to go to a secret court for permission to seize suspects’ records from libraries and bookstores.
“Like all compromises, it includes provisions that are not supported by everyone in this body”
The House bill has a 10-year sunset for this provision.
Separate legislation, passed in June in the House, would end the government’s easy access to library and bookstore records by making law enforcement revert to traditional search warrants.
That measure, attached to a fiscal 2006 spending bill, has drawn a veto threat from the White House.
Similarly, the Senate has a four-year extension for allowing roving wiretaps, which let the government eavesdrop on suspects as they switch from phone to phone.
The House bill has a 10-year extension.
The legislation advanced in Congress shortly after the 7 July bombings of London’s subway and a bus that killed 52 people and injured hundreds. That was followed by a 21 July failed bombing attempt on London’s transportation network.
Still to be considered by the full Senate is separate legislation by its Intelligence Committee that would give the government even broader powers to get records without a judge’s permission.
Those provisions have drawn heavy opposition.