Even though key differences remain on how to fix the state's water problem, Gov. Arnold Schwarzenegger backed off on his mass veto threat.
He even called a special session on the water issue signaling his confidence on an eminent deal.
After marathon meetings over how to fix California's aging water system that two-thirds of the state relies on, state leaders say they are very close to an agreement.
Farmers and workers who've been pressuring them do something after decades of inaction are, are for the first time, optimistic.
"We are where we've never been before, so I'm confident," said Mario Santoyo of the California Latino Water Coalition.
There appears to be agreement on 20 percent water conservation and more than $9 billion in bonds for storage like dams.
That was apparently enough to avoid a mass veto of some 700 bills.
The governor had threatened to do so if a water plan wasn't on his desk by Sunday night, but he backed off.
"Because made enough progress and they focused like he said they ought to on water, he didn't go through with all the vetoes," said Aaron McLear, the governor's press secretary.
When asked if there is an actual plan on the governor's desk, McLear said there is not.
Democratic leaders admit the threat worked to move them forward.
"I take threats seriously. He did a mass veto last year of the bills because of the budget," said Los Angeles Assemblywoman Karen Bass.
The governor posted on his Twitter account late Sunday a picture of himself acting on the bills before the midnight deadline.
Critics say the threat didn't work and was never really serious.
"This is a governor that always wants action, action, action. This time, he tried to threaten, threaten, threaten. And he came up empty handed. I think the legislature called him on his game of chicken he played," said Steve Maviglio, a democratic strategist.
The Governor vetoed 229 bills, but signed 478 including an inmate reduction plan, shrinking the prison population by up to 25,000; an ammunition sales registry, requiring vendors must get the purchasers' thumbprints and other personal information; airport permission to shoot birds if they endanger planes; recognition of same-sex marriages from other states; and pe-cosmetic surgery physical exam, prompted by the death of Kanye West's mother.
The governor also signed two bills that he made fun of over the summer, because he thought they were frivolous. He signed a bill that prohibits cutting a cow's tail and another bill that establishes a Blueberry Commission.