Dive Flags in California

The COLREGS (International Regulations for Preventing Collisions at Sea (Federal and International)) do say that, more or less, but it's generally accepted that it means for a tethered diver (hard hat).  And BTW, it's supposed to be a 1 meter rigid replica of an Alpha flag, not a cloth flag.

The COLREGS say nothing about the red and white dive flag, though it is used world wide.  I once did a survey of the dive boat pictures in Skin Diver.  A larger fraction of foreign boats were flying the red-and-white than the US boats.

Here's what CALIFORNIA law says about "divers flag"s. 

My read on this (I'm not a lawyer):

a. describes the flag.  This is, BTW, less precise than the industry standard, which says the flag is five units wide, four unit high, with a stripe one unit wide.

b. says the boats can still do as they damn well please.

c. says you can sue them if they hit you.  Fine is $135.

d. says you can be cited for motoring around with your dive flag up.  Fine is $76. 

It all says you don't HAVE to fly a dive flag.

California Code of Regulations

Title 14.  Natural Resources
Division 4. Department of Boating and Waterways
Chapter 1. Department of Boating and Waterways 
Article 6.Waterway Marking System
§7008. The Divers Flag.

(a) A red flag with a white diagonal running from the upper left hand corner to the lower right hand corner (from masthead to lower outside corner) and known as the “Divers Flag” shall when displayed on the water, indicate the presence of a person engaged in diving in the water in the immediate area.

(b) Recognition of this flag by regulation will not be construed as conferring any rights or privileges on its users, and its presence in a water area will not be construed in itself as restricting the use of the water area so marked.

(c) Operators of vessels will, however, exercise precaution commensurate with conditions indicated.

(d) This flag may be displayed only when diving is in progress, and its display in a water area when no diving is in progress is that area will constitute a violation of the regulation and of section 659 of the Harbors and Navigation Code.

(e) Nothing in this section will require the carriage of a divers flag for any purpose.

NOTE

Authority cited: Section 659, Harbors and Navigation Code.
Reference: Sections 650, and 659, Harbors and Navigation Code.

Here's what the COLREGS say:

Vessels Not Under Command or Restricted in Their Ability to Maneuver

(a) A vessel not under command shall ... <<Not under command means the rudder is busted, or some such.>>

(b) A vessel restricted in her ability to maneuver, except a vessel engaged in mineclearance operations, shall exhibit:

(i) three all-round lights in a vertical line where they can best be seen. The highest and lowest of these lights shall be red and the middle light shall be white;

(ii) three shapes in a vertical line where they can best be seen. The highest and lowest of these shapes shall be balls and the middle one a diamond.

(iii)when making way through the water, a masthead light, sidelights and a sternlight in addition to the lights prescribed in subparagraph (i);

(iv) when at anchor, in addition to the lights or shapes prescribed in subparagraphs(i) and (ii), the light, lights, or shape prescribed in Rule 30.

(c) A power-driven vessel engaged in a towing operation ...

(d) A vessel engaged in dredging or underwater operations, when restricted in her ability to maneuver, shall exhibit the lights and shapes prescribed in
subparagraphs (b)(i),(ii) and (iii) of this Rule and shall in addition when an obstruction exists, exhibit: 

(i) two all-round red lights or two balls in a vertical line to indicate the side on which the obstruction exists;

(ii) two all-round green lights or two diamonds in a vertical line to indicate the side on which another vessel may pass;

(iii) when at anchor, the lights or shapes prescribed in this paragraph instead of the lights or shapes prescribed in Rule 30.

(e) Whenever the size of a vessel engaged in diving operations makes it impracticable to exhibit all lights and shapes prescribed in paragraph (d) of this Rule, the following shall be exhibited:

(i) Three all-round lights in a vertical line where they can best be seen. The highest and lowest of these lights shall be red and the middle light shall be white;

(ii) a rigid replica of the code flag "A" not less than 1 meter in height. Measures shall be taken to ensure its all-round visibility.

(f)A vessel engaged in mineclearance operations shall ...