Thousands were injured and homes were wrecked
The blast at the AZF factory killed 30 people and injured 2,500 others.
The Environment Ministry's proposals, which were drawn up hastily after the September explosion, have been criticised by a parliamentary inquiry for being too limited.
But Environment Minister Yves Cochet has said he hopes the laws can be made more far-reaching during their passage through parliament.
Workers at risk
Mr Cochet said that his main concern was to reduce risks at source.
He told Le Progres newspaper that separating industrial sites from built-up areas was not the "miracle solution".
The extent of the damage caused by the Toulouse blast - which left thousands of people's homes wrecked - was blamed on its proximity to areas of housing.
But Mr Cochet said that distancing industrial sites "would not reduce the risks for the workers who are, after all, most affected of everyone".
Population uninformed
Under the proposed measures, factories considered high-risk would be required to split up their stock, seal it in a double container or bury it.
They would also have to carry out regular accident drills - currently they only take place every five years.
Mr Cochet also said that the number of inspectors would have to be increased - from the current level of 1,020 up to 2,000.
But environmental protection organisations criticised the proposals for not going far enough.
"Information on the ground is almost non-existent," said Liliane Elsene from France Nature Environment.
"Town halls often do not distribute posters about what to do in an accident because they are afraid of frightening the population," she said.
The proposals are expected to be debated by parliament in the autumn and could be law before the end of the year.