What Kind of Coast Guard License Do I Need?

I am interested in starting a charter business with a small boat on Lake Havasu, and I have a few questions about licensing. I have been told that I will need to get a Coast Guard license and have my boat inspected by the Coast Guard to carry passengers for hire. However, a friend of mine operates a passenger boat on Lake Shasta and he tells me that the Coast Guard has no jurisdiction on a lake, unless the lake is accessible by a boat from the ocean. What exactly are the rules for carrying passengers for hire on a lake?

The Coast Guard’s jurisdiction for the licensing of passenger vessels and vessel operators extends to all of the “navigable waters” of the United States. Broadly speaking, the application of federal admiralty law for most other purposes is also limited to these same “navigable waters,” so it may be helpful to define this term.

The reader’s friend was partially correct, in that any body of water that is accessible by a boat from the ocean will be deemed “navigable waters,” and therefore subject to Coast Guard and admiralty jurisdiction. However, the term also applies to any body of water that crosses a state line.

Lake Havasu and Lake Tahoe, therefore, are subject to federal jurisdiction. Conversely, lakes that lie completely within one state, such as Big Bear Lake or Lake Shasta, are subject only to the jurisdiction of that state.

Any vessel that carries more than six passengers for hire on navigable waters must be documented by the Coast Guard with a “coastwise” endorsement, and inspected and certified by the Coast Guard to carry passengers for hire. And the operator of a vessel that carries at least one passenger for hire on navigable waters must be licensed by the Coast Guard as a vessel master.

State waters, such as Lake Shasta, are exempt from Coast Guard licensing and inspection requirements, but many states nonetheless have their own laws for the regulation of these vessels. In California, the Department of Boating and Waterways administers its “For Hire” program to regulate vessel operators under the provisions of Section 760 of the California Harbors and Navigation Code.

A vessel that carries passengers for hire on California state waters is generally subject to less oversight than a federally regulated vessel. Federal law regulates the construction of passenger vessels — including plumbing, electrical, stability and structural requirements. California state regulations are much simpler and are more of a set of safety guidelines than specific regulations.

Similarly, a captain of a Coast Guard-regulated passenger boat is required to establish a lengthy background of sea time prior to taking his or her exam for a master’s license. That level of experience is not required for the operator of a passenger vessel on California state waters. However, for California waters, a vessel operator is required to show proficiency aboard the vessel that he or she will actually be operating.

A Coast Guard master’s license is issued solely upon the basis of a written exam and background check. The applicant for a Coast Guard license is never actually required to demonstrate his or her proficiency in the operation of a vessel.

The regulations for the operation of a passenger vessel are quite extensive, and the jurisdiction of the Coast Guard is a very small part of that picture. Anyone interested in undertaking this kind of project should first consult a qualified maritime attorney.