President Donald Trump’s Dec. 30 veto of legislation aimed at easing repayment terms for a long-delayed federal water project has injected new uncertainty into the completion of the Arkansas Valley Pipeline, a gas pipeline already fully under construction in Colorado.
The Arkansas Valley Conduct Act was one of two bills Trump vetoed in early 2026, marking the first vetoes of his second term despite bipartisan approval in both chambers. The other measure was unrelated to infrastructure.
The Arkansas Valley Pipeline bill, HR 131, did not authorize funding for new construction. Instead, it sought to change the way local communities repay the federal government by limiting local liability to 35 percent of construction costs and allowing the remaining balance to be repaid over up to 75 years at a reduced interest rate, subject to a determination of financial hardship by the US Bureau of Claims.
The bill was sponsored in the House by Rep. Lauren Boebert (R-Colo.), with Rep. Jeff Hurd (R-Colo.) as co-sponsor, and introduced in the Senate by Sens. Michael Bennet and John Hickenlooper, both D-Colorados.
The measure passed the House by voice vote and the Senate by unanimous consent on December 14, 2025. Construction on the conduit began in 2023, and more than $200 million has already been invested through a combination of federal, state and local funding, according to the Southeast Colorado Water Conservation District.
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The project’s main trunk line, which includes more than 120 miles of pipe being delivered under the Bureau of Reclamation’s rural water program, is under construction.
Once completed, the complete Arkansas Valley Pipeline System is expected to include approximately 230 miles of pipeline, including distribution splines designed to deliver up to 7,500 acre-ft of treated water per year from Pueblo Reservoir to 39 communities in southeastern Colorado.
What will it take to finish?
Total project costs have risen to roughly $1.4 billion, according to federal and local estimates, meaning more than $1 billion in construction and delivery work remains beyond the trunk line now under construction.
Project sponsors and federal officials attribute the escalation primarily to construction inflation, rising materials, labor costs and expanding scope as the project moved from decades of planning to phased construction. The project’s original 1960s permitting cost assumptions did not take into account modern drinking water treatment standards, longer distribution laterals needed to reach smaller communities, or sharp increases in steel, concrete and fuel prices starting in 2020. Federal construction cost indices show that water infrastructure inputs remain well above pre-2020 levels, increasing cost pressure as long-term projects.
The project serves communities in Pueblo, Bent, Crowley, Kiowa, Otero and Prowers counties, where many systems rely on groundwater sources that naturally contain radionuclides and do not meet current federal drinking water standards. The Bureau of Reclamation has previously described the conduit as a critical rural water project needed to bring affected systems into compliance.
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With a veto, what happens next?
In his veto, Trump argued in a message to Congress that it would expose federal taxpayers to additional financial risk.
“My administration is committed to preventing American taxpayers from funding expensive and unreliable policies,” he wrote. “Ending the massive cost of taxpayer handouts and restoring fiscal sanity is vital to the nation’s economic growth and fiscal health.”
For construction, the veto stops a funding adjustment for an active federal project by changing how existing construction costs will be paid, not blocking a new authorization.
“This is not a frivolous project,” Chris Woodka, senior director of policy and issues for the Southeast Colorado Water Conservation District, told Colorado Public Radio in an interview. “It’s a project that meets federal water quality standards to ensure 50,000 people drink clean, non-carcinogenic water.”
Members of Colorado’s congressional delegation said the veto undermined a rare bipartisan agreement on a rural infrastructure project with substantial sunk costs.
“President Trump decided to veto a completely non-controversial bipartisan bill that passed both the House and Senate unanimously,” Boebert said in a prepared statement.
Hurd said the legislation was designed to protect existing investments rather than expand federal exposure.
“The vetoed legislation did not authorize new construction spending or expand the federal government’s original commitment,” he said. “More than $200 million has already been invested, along with significant state and local contributions. Further delay risks draining taxpayer dollars and leaving communities without a viable path to meeting drinking water standards.”
Bennet and Hickenlooper also criticized the veto and urged Congress to consider an override.
While the veto does not immediately halt construction, project officials said current phases are funded and moving forward, although future segments will require an override of the veto or alternative funding to proceed on schedule. Unresolved reimbursement conditions could delay or limit subsequent phases of the system.
