SACRAMENTO, Calif. (Legal Newsline)-Legislative leaders in California have just hours to reach a deal with Gov. Arnold Schwarzenegger to convince the Republican not to veto many of the 704 bills awaiting his action, including proposals opposed by legal reformers.

The Republican governor has threatened to veto most of the bills on his desk unless he and Senate and Assembly leaders agree on a multibillion plan to upgrade the state's complex water system.

The governor has until Sunday to act on the bills, which range from protections against predatory lending to veterans' benefits to funding for under-performing schools. State law says the governor has 30 days to act on bills after the legislative session's end.

Among the bills on the governor's desk of interest to legal observers is three proposals that could change the legal landscape in the Golden State, said Kim Stone, vice president of legislation for the Civil Justice Association of California.

One of the bills, Assembly Bill 793, would make it easier for California workers to sue for alleged age discrimination on the job.

The bill was introduced in response to a 2007 U.S. Supreme Court decision -- Ledbetter v. Goodyear Tire & Rubber -- that employees cannot challenge ongoing pay discrimination if the employer's original discriminatory pay decision occurred outside of the statute of limitations.

The governor vetoed similar legislation last year. Stone said the reasons for the governor to reject the proposal this session are even more compelling since Congress has since passed the Lilly Ledbetter Fair Pay Act.

"That means he 'problem' of the Ledbetter case has been solved so there is no need for this California bill, which goes even farther than the federal bill did and potentially undoes the statute of limitations in all employment discrimination cases - not just sex discrimination cases," Stone said in an interview last week.

A second bill, she said, would limit the ability of insurance companies to cancel coverage for patients diagnosed with serious illnesses, a practice known as rescission.

Assembly Bill 2 would allow state regulators to block the rescission of coverage so long as a patient is not found to have intentionally lied to the insurer about preexisting conditions.

The governor vetoed a similar measure last year amid concerns that the bill would lead to excessive litigation.

The third bill, Assembly Bill 335, would "disfavor" employers' use of forum selection and choice of law clauses in their employment contracts, Stone said.

The governor last year vetoed a bill that would have barred employers from placing selection and choice of law clauses in their contracts with workers.

As for talks on a water deal over the Sacramento-San Joaquin River Delta, legislative leaders say they remain at a stalemate over the size of a water bond measure for new reservoirs and canals, and remain divided over conservation mandates and existing water rights protections, among other sticking points.