Creates new GS 126-8.7 (Paid bereavement leave), requiring the State Human Resources Commission to adopt rules and policies granting permanent, probationary, or time-limited full-time state employees paid leave after the death of an immediate family member (40 hours of leave) or colleague (8 hours of leave). Specifies requirements for the rules and policies, including requiring a statement identifying the relationship to the deceased and documentation for immediate family members, placing no annual limit on the number of uses of the leave, granting time to travel on the day of the funeral for the death of a colleague, requiring that the leave be used within 180 days of the death for an immediate family member, and disciplinary action or dismissal for falsely claiming leave. Outlines the nature of the leave, including that it is in addition to sick and annual leave, has no cash value upon termination, does not count towards retirement eligibility, cannot be applied to negative leave balances, and is not eligible for donation as shared leave. Mandates that the statute is applicable to all state employees, employees of the University of North Carolina system, public school employees, and community college employees, and directs the appropriate governing board, officer, or entity to adopt rules and policies to implement the leave equivalent to those adopted by the State Human Resources Commission.

Amends GS 126-5(c19) including references to the new GS 126-8.7.

Appropriates $2,000,000 from the General Fund for each year of the 2025-27 biennium to the Reserve for Compensation Increases for the paid bereavement leave.

Effective and applicable to requests for leave for deaths occurring on or after July 1, 2025.