--- a/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Attr.java	Thu Jan 08 22:01:20 2015 -0800
+++ b/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Attr.java	Fri Jan 09 15:48:09 2015 +0000
@@ -207,6 +207,7 @@
      *  are correct.
      *
      *  @param tree     The tree whose kind and type is checked
+     *  @param found    The computed type of the tree
      *  @param ownkind  The computed kind of the tree
      *  @param resultInfo  The expected result of the tree
      */

--- a/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Resolve.java	Thu Jan 08 22:01:20 2015 -0800
+++ b/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Resolve.java	Fri Jan 09 15:48:09 2015 +0000
@@ -1008,7 +1008,7 @@
                 DeferredType dt = (DeferredType)found;
                 return dt.check(this);
             } else {
-                Type uResult = U(found.baseType());
+                Type uResult = U(found);
                 Type capturedType = pos == null || pos.getTree() == null ?
                         types.capture(uResult) :
                         checkContext.inferenceContext()

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/test/tools/javac/conditional/ConditionalWithFinalStrings.java	Fri Jan 09 15:48:09 2015 +0000
@@ -0,0 +1,69 @@
+/*
+ * Copyright (c) 2015, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/*
+ * @test
+ * @bug 8066871
+ * @summary java.lang.VerifyError: Bad local variable type - local final String
+ * @author Srikanth Sankaran
+ *
+ * @compile -g:none ConditionalWithFinalStrings.java
+ * @run main ConditionalWithFinalStrings
+ */
+
+public class ConditionalWithFinalStrings {
+
+        interface I {
+            String foo();
+        }
+
+        static class Tmp {
+                private String value;
+                public void setValue(String tmpStr) {
+                        this.value = tmpStr;
+                        if (!this.value.equals("YES"))
+                            throw new AssertionError();
+                }
+        }
+
+        void goo(I i) {
+            if (!i.foo().equals("YES"))
+                throw new AssertionError();
+        }
+
+        public void test() {
+                final String y = "YES";
+                final String n = "NO";
+                Tmp tmp = new Tmp();
+                tmp.setValue(true ? y : n);
+                goo (() -> y);
+
+        }
+        public static void main(String[] args) {
+                new ConditionalWithFinalStrings().test();
+                if (!id("Hello!").equals("Hello!"))
+                    throw new AssertionError();
+
+        }
+        static <Z> Z id(Z z) { return z; }
+}