City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: December 1, 2025
Report #:2510-5383
TITLE
FIRST READING: Adoption of an ordinance to Amend Chapters 4.54 and 4.56 of the Palo Alto Municipal Code to Amend the Regulation of Massage Establishments and Hot Tub/Sauna Establishments as Recommended by the Policy & Services Committee; and Adoption of a Resolution to Amend the Administrative Penalty Schedule to Amend Related Penalties; CEQA status - not a project.
RECOMMENDATION
The Policy and Services Committee and staff recommend the City Council adopt an ordinance (Attachment A) amending the Palo Alto Municipal Code Chapter 4.54 on massage establishments and Chapter 4.56 on hot tub/sauna establishments, as unanimously recommended by the Policy and Services Committee on October 29, 2025. Staff also recommend adoption of a resolution amending the Municipal Penalty Schedule (Attachment B) to conform existing penalties to new code numbering and delete penalties for sections no longer used.
EXECUTIVE SUMMARY
The proposed ordinance updates the Palo Alto Municipal Code to regulate massage and massage therapists in Palo Alto as well as hot tub/sauna businesses. For massage businesses and therapists, the codes provide clear standards to ensure massage therapy businesses are run safely and legally by setting basic rules for their buildings, cleanliness, and staff qualifications, while also deterring illegal activities like human trafficking, wage theft, and prostitution. This update allows only massage therapists certified by the state-sanctioned non-profit California Massage Therapy Council (CAMTC) to conduct massage in the City. The new framework also offers City enforcement staff a broader mandate, increased options for enforcement, and clearer parameters for action. For Hot Tub/Sauna establishments, the proposed code directs the business operator to comply with Santa Clara County Department of Environmental Health requirements so the City can delete redundant codes.
BACKGROUND
Palo Alto’s regulation of massage and hot tub/sauna businesses has evolved over the years. For massage businesses, it began formally in the early 1970s when the city enacted PAMC 4.54 to regulate massage businesses, in response to concerns about health and public safety. Codes were amended in 1997 to allow home-based massage businesses1.
In 2008, California passed Senate Bill 731 (SB 731), which changed how massage therapy is regulated in the state. This law created the California Massage Therapy Council (CAMTC), a state-sanctioned nonprofit organization that certifies massage therapists across California.
Before this law, each city had its own rules, which created confusion. SB 731 replaced this inconsistent system with statewide standards, making it easier to regulate massage schools and conduct background checks on therapists. This improved both professional standards and public safety but caused some tension between state and local control.
In 2011, the state passed another law (AB 619) that gave some control over massage business licensing back to cities. The City responded by updating its Municipal Code in 2012, which remains the current regulation for massage businesses2.
California AB 1504, authored by Assemblymember Marc Berman and signed into law in October 2025, and extends the CAMTC's authority until 2030 while implementing reforms including salary caps for staff, modernized criminal conviction standards aligned with fair chance licensing, and enhanced public transparency requirements. The law also restructures the council's governance, relaxes certain practice restrictions like healthcare referral requirements, and removes specific attire prohibitions while maintaining general professional standards3.
About CAMTC
CAMTC is a state-regulated nonprofit public benefit corporation with a 501(c)(3) tax exempt status that sets and regulates professional standards in the California massage industry, protecting the public and legitimizing the valued benefits of massage. The organization is run by a volunteer Board of Directors made up of 13 members from different backgrounds.
California law specifies how board members are selected: Four members represent local governments, including law enforcement and public health agencies; two members represent massage schools; one member represents an anti-human trafficking organization; and one member is appointed by the Director of the Department of Consumer Affairs. Two board 1 City Council, June 10, 1997 Report #273-97
https://portal.laserfiche.com/Portal/DocView.aspx?id=60793&repo=r704298fc&searchid=a23b43a1-b630-493e- 87c1-21a2f6be1f37
2 City Council, September 4, 2012, Second reading Full Report #2988 in first reading on 7/23/12 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2012/id-2988-original.pdf
3 California Assembly Bill 1504, 2025-2026 Regular Session (Cal. 2025) https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB1504 positions are reserved for actual massage therapists. The American Massage Therapy Association California Chapter appoints one certified therapist who has at least three years of experience. Another therapist is chosen from any professional massage organization that has at least 1,000 members in California, was established since 2000, and requires members to follow a code of ethics. That seat rotates among the professional organizations every four years.
In Palo Alto, staff has identified 19 existing massage establishments that will need to obtain annual establishment permits under the new code. Of the 150 massage professionals in Palo Alto, every massage therapist is already CAMTC certified or is working on obtaining certification. Staff has identified one Hot Tub/Sauna business.
Policy and Services Committee Recommendation
At its October 29, 2025, meeting, the Policy and Services Committee unanimously recommended that the City Council adopt the Ordinance (Attachment A). Since then, the ordinance attached has been updated for clarity as follows: (1) the insurance requirements are now clearly stated in the ordinance instead of referring to separate regulations; and (2) there is now a clear deadline (14 days) for filing an amendment to an existing permit when a change occurs.
ANALYSIS
This discussion will address massage businesses and then hot tub/saunas. Since the last time Palo Alto updated the PAMC related to massage businesses in 2012, several more state assembly bills have been passed. The proposed ordinance would align Palo Alto with current state law, the CAMTC standards, and updated regulatory practices, fostering a safe and healthy environment for the massage business community, service providers, and the customer.
Similar to the current code, the proposed code requires massage establishments and practitioners to meet certain minimum standards, including building, sanitation, and operational requirements. Massage establishments will have a local permit to operate, with provisions for annual permit renewals, application procedures, and associated fees. Like current code, the proposed code requires permits to be displayed where they are easily visible and allows city officials to inspect establishments to ensure compliance. Both existing and proposed codes provide a process for denying, suspending, or revoking permits if applicants or permit holders are found to have violated certain rules or laws. There is also an appeal process for those who have been denied a permit or had one revoked.
Additionally, both the new and proposed laws exempt certain professionals, such as physicians, nurses, physical therapists, and people who are certified by the California Massage Therapy Council (CAMTC), meaning those individuals do not need to obtain additional local permits.
Both the existing and proposed codes have detailed definitions to clarify the terms used throughout the law, and they require compliance with other relevant city and state codes, such as building and health regulations. Overall, the main similarities lie in their goals of ensuring only qualified people can operate or work in massage establishments, maintaining high health and safety standards, and providing clear procedures for permitting, enforcement, and appeals for both businesses and their practitioners.
Despite many similarities with the existing code, the proposed code introduces several major changes. One of the biggest differences is the strong reliance on California’s statewide certification system for individual professionals. Under the new code, only CAMTC-certified professionals can legally provide massage services for compensation, eliminating the City’s existing system of issuing separate permits to individual massage technicians and trainees who do not want to be state-certified. This will shift credentialing and background checks of individual therapists to the non-profit, whereas the existing code required the police chief, or designee, to review the education, background, and criminal history for each applicant.
Another difference is that the proposed code adds more clarity for massage operators about the permitting process. The proposed code details exactly what information is required for business permits and includes more requirements for transparency, such as proof of lease or property owner acknowledgment and documentation of compliance with wage and hour laws.
The proposed code also expands operational requirements, like stricter rules on business hours (10 p.m. to 8 a.m. overnight closure, compared to 11 p.m. to 9 a.m. in the existing code), customer privacy, and hygiene, and prohibits certain items like beds. There are also more specific rules for facility layout, signage, and clothing requirements, and mandatory posting of human trafficking notices.
Additionally, the proposed code sets out more comprehensive grounds and procedures for permit suspension or revocation, including violations of labor laws and advertising regulations.
It also gives the City the power to impose a five-year moratorium on massage businesses at locations where a permit was revoked, temporarily impacting a property owner’s ability to lease space to other massage businesses. Finally, the proposed code adds administrative penalties and citations as enforcement tools and more clearly separates mobile and home- based businesses from fixed establishments. These changes will increase the responsibility of property and business owners to comply with regulations, thereby enhancing worker protection, public safety, and business integrity. The amended administrative penalty schedule (Attachment B) also updates the numbering of existing penalties to match updated code sections, as well as deletes penalties related to saunas that will no longer be in use.
Staff would like to express appreciation to the Santa Clara County Human Trafficking Task Force, CAMTC staff, and City of Sunnyvale personnel for their valuable input and collaboration in developing these amendments to the massage ordinance. Their expertise and support were instrumental in shaping these changes.
For hot tub/sauna code sections, much of the code is deleted and the licensing requirement is changed from City issuance to a requirement it be licensed by Santa Clara County Department of Environmental Health, which already licenses such businesses for compliance with County environmental health standards.
FISCAL/RESOURCE IMPACT
The work to create this proposal has been done by City staff with no-cost support by the previously mentioned organizations. The adoption of the proposed ordinance would not significantly impact existing workload of staff. Department revenue and expenses are not expected to change. Updated fees related to permitting will be updated in the FY 2027 budget cycle if they are required.
STAKEHOLDER ENGAGEMENT
As massage establishments and massage therapist applicants have contacted code enforcement over the last year, staff has notified them that the City is exploring significant updates regarding regulation and permitting processes for massage establishments. Staff also hosted a meeting in mid-November to which representatives from all current massage establishments in Palo Alto were invited, where staff discussed the proposed changes, answered questions, and heard feedback.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), as it can be seen with certainty that the activity will not have a significant effect on the environment.
ATTACHMENTS
Attachment A: Ordinance Amending PAMC Chapters 4.54 and 4.56 to update regulation of massage practitioners, businesses, hot tub/sauna businesses Attachment B: Resolution Amending the Administrative Penalty Schedule to adjust the numbering of some penalties and delete penalties for sections no longer in use APPROVED BY:
Andrew Binder, Police Chief