From email from the Colorado Water Trust:
On June 4, 2009, Colorado Governor Bill Ritter signed HB 09-1067 (pdf) into law. This new legislation becomes effective today, August 5, 2009. This exciting piece of legislation creates the Instream Flow Tax Credit program, which provides a tax credit of up to 50% of the value of a water right donated to the Colorado Water Conservation Board (“CWCB”) for use in the state’s instream flow program. This program encourages voluntary water rights donations to preserve Colorado’s streams and lakes. Please note, however, that the amount of annual revenue which the legislature can spend is limited by state statute. The ISF tax credit will not be allowed in years (such as this year) in which revenues are not expected to exceed this limit.
Here’s the link to their FAQ on the legislation.
More 2009 Colorado legislation coverage here.