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State employee leave and retirement benefits would change under this bill, which sets up a new "paid time off" (PTO) system to replace separate annual leave and sick leave for state agency employees. Starting no later than July 1, 2027, new employees would automatically join the PTO program, while current employees would choose between staying on their existing annual leave/sick leave setup (called the "legacy program," which keeps their current 401(k) match) or switching to PTO; anyone who doesn't make a choice by the state's deadline would default into the PTO program. Employees who switch would have their unused annual leave converted to PTO hours on a one-to-one basis, and those in the newer Tier II retirement system who choose PTO would get a modified 401(k) match — a full match on the first $26 contributed per pay period and a 50% match above that, up to a cap of $26 or 2% of biweekly pay, whichever is greater. The bill also requires every state agency to create a leave bank allowing employees to voluntarily donate PTO hours to coworkers who qualify for extra leave, and gives state human resources and finance officials rulemaking authority to administer these new programs.