Requires the department of commerce to perform an independent financial feasibility review before any of the following events: (1) The formation of a public facilities district under chapter 35.57 or 36.100 RCW;

(2) The issuance of any indebtedness by a public facilities district under chapter 35.57 or 36.100 RCW; or

(3) The long-term lease, purchase, or development of a facility under chapter 35.57 or 36.100 RCW.

Requires the state treasurer and the state auditor to: (1) Examine the financial condition of the state's two thousand four hundred local governmental entities to identify those in which there may be indications of financial distress; and

(2) Consult with certain parties to assist in the examination of the financial conditions of the local governments.

Requires the state treasurer to recommend legislation to establish a forward-looking capacity to protect the state and its local governmental entities from negative effects in the unlikely event of another impending default on debts owed by a local governmental entity.