House Passes Auto Bailout Legislation

On December 10, 2008, the House passed the Auto Industry Financing and Restructuring Bill (HR 7321) by a vote of 237 to 170. Included in the legislation to provide $15 billion in loans to the domestic auto industry are provisions limiting executive compensation and allowing the use of net operating losses of an acquired automaker.

It is not clear whether the Senate will follow this version of the legislation or work with its own version, which includes a controversial provision making the Treasury Department the guarantor of certain sale-in/lease-out transactions between investors and state and local governments.