Nearly 70 years after Hitler's defeat, the bill will be presented on Friday in the upper house of parliament, the Bundesrat -- which represents the 16 federal states at the national level -- with the aim of helping the restitution of art that was extorted or stolen from Jewish collectors.
If enacted, the Bavaria-drafted bill would eliminate a statute of limitations applied to stolen property, usually 30 years, that some art collectors have used to protect their holdings from claims.
The move comes three months after news broke that around 1,400 long-lost works by the likes of Picasso, Cezanne and Degas had been discovered in the Munich flat of an elderly German recluse.
Another 60-odd artworks, including pieces by Monet and Renoir, have also been unearthed at the Salzburg house in Austria of 81-year-old Cornelius Gurlitt, his spokesman said in a surprise announcement Tuesday.
The proposed law has been dubbed the "Lex Gurlitt" after the son of a Nazi-era art dealer in whose apartment the art hoard was found in 2012, a discovery which authorities long kept quiet.
So far the reception has been mixed to the new push to right past wrongs.
"In principle this draft law is a positive sign," said Markus Stötzel, lawyer for the descendants of Alfred Flechtheim, a leading 20th century German Jewish art dealer.
"It shows that the political conscience is in the process of waking up in Germany after lapses in the past. The Gurlitt case has got things moving," he told AFP.
However Sabine Rudolph -- representing the heirs of a Jewish lawyer from Dresden, Fritz Salo Glaser, who are demanding the restitution of at least 13 artworks from the Gurlitt trove -- was more sceptical.
"In my opinion this draft law is just a case of 'action for show'," she said.
She took aim in particular at a clause that victims' heirs must prove the work's current holder acted in bad faith, by knowing the item's origin or having clear evidence for it.
"How do you want them to do that?" she asked.
Stötzel also underscored the practical difficulties of such a condition after so many years and said the draft law, which would also have to pass the lower house, was only "a first step".
"After 70 years, in many cases, knowledge about the fate of paintings is very basic. Many documents have been lost," he said.
Culture Minister Monika Grütters has acknowledged the hurdles and predicted "some difficulties in its implementation" in recent comments to the Frankfurter Allgemeine Zeitung daily.
She said she was pondering, together with the justice minister, "legal possibilities" that could help.
'Evidence of good faith'
Germany in 1998 signed the Washington Declaration which commits its 44 signatory nations to track down and return art stolen by the Nazis to its rightful owners.
But the non-binding agreement applies only to states, public institutions and private museums, not to individuals.
Soon after World War II, then West Germany planned to pass legislation to tackle the issue of Nazi-looted art found in the country's museums but the Allies -- Britain, France and the United States -- rejected the move, fearing it would prove chaotic.
The head of the World Jewish Congress Ronald S. Lauder last month urged Germany to introduce a law to specifically facilitate the return of Nazi-looted art and welcomed the draft law as "evidence of good faith".
He noted in a Berlin speech that Germany, in atoning for its past, had already negotiated compensation on slave labour, stolen bank deposits and insurance policies.
"I encourage Germany to deal with Nazi-looted art in the same comprehensive manner," he said, calling the works "the last prisoners of World War II".
And he said the onus should be on museums, not the victims of Nazi plundering, to search through their collections for stolen works and track down their rightful owners.
"Austria has done this. France and Holland have made steps in this direction and the UK has a commission that is available to examine claims and advise the government on restitution," he said.
"But this is Germany, where the crime began. More is required."