US House OKs divestiture from companies in Iran

WASHINGTON, Oct 14 (Reuters) - The U.S. House of Representatives on Wednesday overwhelmingly passed legislation that would allow college funds and state and local government pension funds to bar investment in companies involved in Iran's energy sector.

The legislation, which must still be approved by the Senate if it is to become law, is intended to punish Iran for its nuclear program. The bill is similar to legislation enacted last year that allowed divestment from firms doing big business in Sudan.

Iran says its nuclear program is peaceful and aimed at generating electricity, but Washington suspects it is aimed at making bombs. The Iran legislation passed the House 414-6.

It gives state and local government, and educational institutions, the authority to divest their assets, or prohibit investing their assets, in any company that invests more than $20 million Iran's energy sector; provides crude oil or liquefied natural gas tankers or builds pipelines for Iran; or is a financial institution that extends $20 million in credit to invest in Iran's energy sector.

The legislation would also amend the Investment Company Act of 1940 to prevent lawsuits against asset managers who chose to divest from companies that have $20 million in Iran's energy sector.

The bill's provisions would end 30 days after the U.S. president certifies that Iran has "ceased its support for terrorism" and stopped pursuing nuclear, biological and chemical weapons.

(Reporting by Tom Doggett)