Billings has a significant problem with illicit businesses operating under the guise of being massage or spa facilities.  Federal Bureau of Investigations (FBI) data from 2017 tracked commercial sex ads in Montana. Bozeman and Missoula had nearly 5,000 ads, while other MT cities had between 2,000 and 3,000 and Billings had nearly 20,000.  These illicit businesses are considered to be a primary source of these ads.  Over the past five years, there have been between 15 and 27 illicit businesses disguised as massage facilities operating within our City on any given night.  

In November 2017, the Federation of State Massage Therapy Boards (FSMTB) Human Trafficking Task Force released the Human Trafficking Task Force Report.  The FSMTB is an autonomous, not-for-profit organization comprised of state regulatory boards and agencies that regulate the massage therapy profession.  This report was the culmination of nearly two years of study. It includes an evaluation of the prevalence and impact of human trafficking on the massage profession.  The report found that between 6,500 and up to 9,000 illicit massage businesses may be active in the United States and that the "commercial-front brothel" was one of the top two venues for sex trafficking. The FSMTB recommended massage therapy facility licensing as a way to combat human trafficking in its 2017 report. The FSMTB report also states that licensing can be a useful tool in protecting legitimate massage businesses and in reducing the number of illicit businesses by providing a jurisdiction with the ability to institutionalize accountability, track illicit business movement, deny or revoke license and impose discipline on establishments.

On November 27, 2017, Council member Sullivan spearheaded an initiative, that was approved by the Council, to develop an ordinance to eliminate illicit businesses that are masquerading as massage and spa facilities in Billings.  The Council's adopted priorities for 2019 and 2020 both included direct references to adopting a massage business license ordinance to assist the City's efforts to improve safety.  Since that time, there have been a significant amount of resources spent on researching and drafting the proposed ordinance. Staff have met with stakeholders, including local massage therapists, and requested input and feedback on the draft ordinance in an attempt to find a mutually acceptable draft.  On January 19, 2021, this was presented to Council at a work session and Council directed staff, by a vote of 9-2, to proceed with preparing a draft ordinance to be brought before Council for First Reading.  The current draft has been reviewed by a subcommittee of Council as well as Administration, Legal, Code Enforcement, Finance, and the Police Department.

This proposed ordinance requires a massage or spa facility to submit an application for a business license.  The application will require the applicant to provide information regarding anyone with an ownership interest in the business. The application will also require:

• Proof of ownership
• Proof of control of the premises
• Previous convictions
• Previous license suspensions and revocations
• State issued massage therapist license

Solo practitioners and other professions that are exempt by state statute will not be required to obtain a license under this ordinance.  This includes acupressure, reflexology, Asian bodywork therapy, reiki, and shiatsu providers.  The ordinance is designed to target only those businesses who purport to provide massage therapy as its primary purpose.  Gyms, barber shops, beauty salons, medical facilities, chiropractors, and other professions licensed under the laws of the state are not regulated by this ordinance. 

The proposed ordinance contains limitations on the operation of facilities in sections 7-1910, such as:

• Operating without a licensed massage therapist
• Prohibits living on premises, unless it is a home occupation
• Prohibits nudity
• Prohibits sexually suggestive advertising
• Prohibits presences of sex toys, lubricant, and contraceptives
• Prohibits sexual contact
• Prohibits concealing individuals from identification

Section 7-1911 of the ordinance places requirements on the facilities, including:

• Maintain records of employees
• Maintain copies of state licenses
• Maintain records of massage therapy performed and available for inspection upon request (customers names are NOT required)
• All employees must have identification
• Keep doors unlocked (subject to some exceptions)
• Permit inspections

Any violation of the terms and conditions of the ordinance may result in fines or suspension and revocation of the business license.  These requirements along with the City's inspection authority (section 13-432 and 7-1912) provides the City with a more effective enforcement tool in the fight against illegal activity.  Most importantly, the requirements of this ordinance will provide a means to deny a business license from the start for those who are disguising their illegal activities as massage facilities. 

This illegal activity is contributing to the City's crime problems.  Criminal investigations of human trafficking are expensive and time-consuming. This ordinance is a low cost, yet effective, tool to chase these illegal businesses out of our community. There is no simple solution or approach that will eradicate this from our community.  However, with proper implementation and enforcement, the enactment of the ordinance will reduce the number of these illegal businesses operating within city limits. 
 

City Council may:

• Approve; or,
• Not Approve

The fee structure for this business license is similar to our current annual business tax receipt of $50 per year.  Therefor, we do not expect to see any increase in revenue as a result of adopting this ordinance.  However, we do expect to reduce crime at a substantially lower cost than to rely exclusively on law enforcement to shut down the illicit businesses disguising themselves as massage and spa professionals.