Rep. Ed Royce, R-Calif., chairman of the House Foreign Affairs Committee, and Rep. Eliot Engel of New York, the panel's top Democrat, said their measure builds on current laws that have undercut the Iranian economy, causing high unemployment and inflation while daily oil production and the value of the country's currency, the rial, have dropped.
The legislation would extend penalties, targeted now at financial entities, to human rights violators and individuals who transfer technologies to Iran that are used by human rights abusers. The bill would penalize individuals involved in censorship or corruption.
Under the measure, the secretary of state would be required to determine whether the country's hard-line Islamic Revolutionary Guard Corps is a foreign terrorist organization. If that decision is made, the president would impose additional penalties.
"Iran's continued march toward nuclear weapons is the gravest threat facing the United States and our allies," Royce said in a statement. "We must build on existing sanctions to maximize economic pressure and prevent Iran from acquiring a nuclear weapons capability."
The legislation comes as world powers meeting in Kazakhstan offered broad concessions to Iran to maintain diplomatic channels that aim to rein its nuclear program and prevent it from building an atomic weapon.
Iran says its nuclear program is geared toward peaceful purposes such as generating electricity and producing nuclear medical radioisotopes for medical use.
The legislation urges the Obama administration to work closely with European nations on finding a way to stop Iran's access to hard currency such as the euro.
"We will continue to tighten the screws on Iran until the regime abandons its nuclear weapons program," Engel said in a statement. "I hope this crisis can be resolved through diplomacy, but words cannot be a substitute for action, and the U.S. must keep all options on the table."
Mark Dubowitz, a sanctions expert and executive director of the Foundation for Defense of Democracies, said that provision also sends a strong message to the European Central Bank ahead of its March 7 meeting in Brussels to "make it much more difficult for Iran to repatriate those euros back to Iran or use those to euros to fund commercial trade."
The bill is certain to attract strong bipartisan support. Earlier measures in the House and Senate targeting Iran's central bank and other entities passed overwhelmingly.