AZ HB2604

Amends Arizona Revised Statutes sections 41-763, 41-763.01, and 41-783 to add authority for activity-based compensation plans for state employees.

Directs the director of personnel to develop a salary plan where employees are remunerated based on "activity based compensation," defined as paying employees for value-added activities with pay fixed to prescribed goals.

Allows the director to exempt employees from the activity-based compensation plan if their job duties make such a plan inappropriate.

Requires the director's annual report to include advisory recommendations on the activity-based compensation plan alongside traditional salary plan recommendations.

Establishes that personnel rules must include establishment of an activity-based compensation plan as a requirement for the state personnel system.