AZ HB2418

Establishes new state personnel system framework in articles 4 and 5 of title 41, chapter 4, replacing prior articles 4 and 5, with definitions of "employee" and "state service" and powers of the director of the department of administration.

Creates special market adjustments system to modify salaries for critical state job classifications experiencing high turnover or below-market compensation, with a special market adjustment committee to assist the director.

Modifies state personnel board appeal procedures to allow the board to reverse agency actions only if found arbitrary, capricious, or contrary to law, and permits boards to modify disciplinary penalties only if disproportionate to the offense.

Updates law enforcement merit system council procedures to align with state personnel board standards, requiring council determinations within 45 days with final agency director approval, and allows appeals to superior court on specified grounds.

Amends references throughout statute from former section numbers (e.g., 41-783 becomes 41-785) and updates military service leave provisions for employees subject to covered service.