Thank you for the suggestion. Luckily the CA income is below the filing thresh hold for CA. My thought is that there should be no CA liability regardless since there is no CA source income.

I am concerned about the beneficiary's OR return since the Federal trust K-1 does not state the amount of interest from U.S. treasury bills. The CA K-1 states the CA non taxable interest. The DNI is all interest and is substantial with the bulk of the interest coming from the treasury bills. It appears that a CA plus an Oregon trust return must be filed to give the beneficiary a K-1 to report the DNI on their OR return. There is no trust tax to CA or OR so no problem in that regard. If there is no other advise from the community I will file a CA plus an OR state trust return in order to supply the OR beneficiary with a K-1..

Again, thank you Just-Lisa-Now