Modifies provisions relating to Washington state ferry system management and ferry construction.

Requires performance targets to be established by an ad hoc committee with members from and designated by the office of the governor.

Requires the department of transportation to complete a performance report that provides a baseline assessment of current performance using final 2009-2011 data.

Requires the marine employees' commission to sever all captains from the masters, mates, and pilots bargaining unit.

Merges the marine employees' commission with the public employment relations commission and directs the public employment relations commission to evaluate the merger and provide recommendations on alternative organizational structures.

Requires the transportation commission to impose a vessel replacement surcharge of twenty-five cents on every ferry fare sold.

Creates the capital vessel replacement account.