Mike Groll, Associated Press
Senate Majority Leader Dean Skelos, R-Rockville Centre, right, speaks during a news conference at the Capitol in Albany, N.Y., on Monday, Jan. 9, 2012 as Assembly Speaker Sheldon Silver, D-Manhattan, left, looks on. The legislative leaders discussed the Iran Divestment Act of 2012 which would prohibit state and local governments from conducting business with companies that invest in Iran's energy sector.

ALBANY, N.Y. — New York's Legislature will prohibit state and local governments from doing business with companies that invest in Iran's energy sector, a measure aimed at better protecting Israel and U.S. national security.

Legislative leaders said Monday they'll join Florida and California in trying to dissuade Iran from developing nuclear weapons or the material needed to build them.

New York will start with a list of 50 global and national companies compiled by California and tell those companies that they must stop dealing with Iran or lose lucrative New York government contracts.

Iran is the "patron of terrorism in the Middle East," said New York Assembly Speaker Sheldon Silver, a Manhattan Democrat.

Senate Majority Leader Dean Skelos, a Long Island Republican, said the Democratic Obama administration isn't doing enough against Iran to protect Israel.

"The only thing they truly understand is strength," Skelos said of Iran. "We cannot tolerate a nuclear Iran."

U.S. Sen. Charles of Schumer of New York said the states' actions have impact. The Democrat said the economic health of the Iranian government helps keep the public in check through civil right abuses.

"The Iranian government will really feel the heat," Schumer said.

This month, the United Nations' nuclear agency confirmed that Iran has begun enriching uranium at an underground bunker to a level that can be upgraded more quickly for use in a nuclear weapon than the nation's main enriched stockpile. Iran recently threatened to blockade the Strait of Hormuz, an important transit route for almost one-fifth of the oil traded globally. Tehran has been angered by the West's efforts to sanction Iran over its nuclear program, including a possible ban on European imports of Iranian oil.

New York Comptroller Thomas DiNapoli, trustee of the nearly $150 billion state pension fund, said the state has already divested holdings worth $86 million in seven companies because of their involvement in Iran and Sudan and has put nine others on a watch list. In Sudan's case, the concern was genocide, and with Iran, it was comments from its regime's leader that amounted to "incitement to genocide in terms of what's being said about the Jewish state of Israel," he said.

Most of firms are energy companies, and fund officials have asked them to reduce risk and in some cases withdraw from operations in those countries, with some successes and failures, DiNapoli said. With fiduciary responsibility to the fund, he has to be sure to replace those investments with others of equal or better value, DiNapoli said.

Associated Press Writer Michael Virtanen contributed to this report.