California Revenue and Taxation Code § 17131.1

(a) Gross income does not include any excludable restitution payments received by an eligible individual (or the individual’s heirs or estate) and any excludable interest. (b) For purposes of this section: (1) The basis of any property received by an eligible individual (or the individual’s heirs or estate) as part of an excludable restitution payment shall be the fair market value of that property as of the time of the receipt. (2) “Eligible individual” means a person who was persecuted on the basis of race, religion, physical or mental disability, or sexual orientation by Nazi Germany, any other Axis regime, or any other Nazi-controlled or Nazi-allied country. (3) “Excludable restitution payment” means any payment or distribution to an individual (or the individual’s heirs or estate) that is any of the following: (A) Is payable by reason of the individual’s status as an eligible individual, including any amount payable by any foreign country, the United States of America, or any other foreign or domestic entity, or a fund established by any such country or entity, any amount payable as a result of a final resolution of a legal action, and any amount payable under a law providing for payments or restitution of property. (B) Constitutes the direct or indirect return of, or compensation or reparation for, assets stolen or hidden from, or otherwise lost to, the individual before, during, or immediately after World War II by reason of the individual’s status as an eligible individual, including any proceeds of insurance under policies issued on eligible individuals by European insurance companies immediately before and during World War II. (C) Consists of interest which is payable as part of any payment or distribution described in subparagraph (A) or (B). (4) “Excludable interest” means any interest earned by any of the following: (A) Escrow accounts or settlement funds established pursuant to the settlement of the action entitled “In re: Holocaust Victim Assets Litigation,” (E.D.N.Y.) C.A. No. 96-4849. (B) Funds to benefit eligible individuals or their heirs created by the International Commission on Holocaust Insurance Claims as a result of the Agreement between the Government of the United States of America and the Government of the Federal Republic of Germany concerning the Foundation “Remembrance, Responsibility, and Future,” dated July 17, 2000. (C) Similar funds subject to the administration of the United States courts created to provide excludable restitution payments to eligible individuals (or eligible individuals’ heirs or estates). (c) (1) This section shall apply to any amount received on or after January 1, 2000. (2) Nothing in this section shall be construed to create any inference with respect to the proper tax treatment of any amount received before January 1, 2000.

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