[Federal Register Volume 81, Number 122 (Friday, June 24, 2016)]
[Notices]
[Pages 41368-41370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15009]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21067]
Prisoner Transportation Services, LLC--Control--U.S. Corrections,
LLC D/B/A U.S.C.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: On May 26, 2016, Prisoner Transportation Services, LLC
(Applicant) filed an application under 49 U.S.C. 14303 so that it can
acquire common control of U.S. Corrections, LLC (U.S.C.). The Board is
tentatively
[[Page 41369]]
approving and authorizing the transaction, and, if no opposing comments
are timely filed, this notice will be the final Board action. Persons
wishing to oppose the application must follow the rules at 49 CFR
1182.5 and 1182.8.
DATES: Comments must be filed by August 8, 2016. Applicant may file a
reply by August 23, 2016. If no comments are filed by August 8, 2016,
this notice shall be effective on August 9, 2016.
ADDRESSES: Send an original and 10 copies of any comments referring to
Docket No. MCF 21067 to: Surface Transportation Board, 395 E Street
SW., Washington, DC 20423-0001. In addition, send one copy of comments
to Applicant's representative: Henry E. Seaton, Esq., Law Office of
Seaton & Husk, L.P., 2240 Gallows Road, Vienna, VA 22182.
FOR FURTHER INFORMATION CONTACT: Amy Ziehm (202) 245-0391. Federal
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.
SUPPLEMENTARY INFORMATION: Applicant states that it is a limited
liability company under the laws of Tennessee and that it owns and
operates two interstate motor carriers: PTS of America, LLC (PTS) (MC-
689407) and Brevard Extraditions, Inc. d/b/a/US Prisoner Transport
(USPT) (MC-643115). Prisoner Transp. Servs., LLC--Control--PTS of Am.,
LLC, MCF 21064 (STB served Nov. 27, 2015) (granting Applicant's request
to acquire common control of PTS and USPT). Applicant states that it
provides a specialized type of for-hire interstate passenger carriage
service through its affiliates, which transport incarcerated prisoners,
including convicts, parole jumpers, and individuals under criminal
indictment who have escaped to foreign jurisdictions, for state and
local prisons, correctional facilities, and sheriff's departments.
Applicant states that, under its affiliates, it currently operates 33
vehicles, including three passenger buses; four specially designed
transporters suitable for the transportation of as many as 25 inmates
and four guards; and 26 vans suitable for the transportation of up to
12 inmates and up to two drivers or guards. Applicant states that four
individuals currently have controlling interest: Alan Sielbeck (38.5%),
Kent Wood (31.5%), Robert Downs (24%), and Lisa Kyle (6%).
Applicant states that U.S.C. is a limited liability company
established under the laws of North Carolina and holds authority from
the Federal Motor Carrier Safety Administration (FMCSA) as a motor
carrier of passengers (MC-872586). According to Applicant, U.S.C. is
engaged in the same specialized type of interstate transportation of
passengers by motor carrier as Applicant, operating specially equipped
van and bus equipment suitable for the transportation of prisoners and
complies with the Interstate Transportation of Dangerous Criminals Act.
Applicant states that U.S.C. operates 12 vans that can hold up to 14
passengers. Applicant states that U.S.C. is currently owned by Steve
Jacques (50%), Ashley Jacques (25%), and Dustin Baldwin (25%).
According to Applicant, if Board approval is granted, U.S.C. would
join it in providing specialized transportation focused on the recovery
and extradition of prisoners from jails and detention facilities in one
state and delivery to points of incarceration in interstate commerce
under guard, using both air-ex and passenger motor carrier service
based upon attractive contract rates.
Applicant explains that under the proposed transaction, the owners
of U.S.C. would transfer their complete interest in U.S.C. to Applicant
and receive a shareholder's interest in Applicant in return. Applicant
states that its combined member and membership interest of would be as
follows once the transfer is complete: Alan Sielbeck (32.7%), Kent Wood
(26.8%), Robert Downs (20.4%), Lisa Kyle (5.1%), Steve Jacques (7.5%),
Dustin Baldwin (3.75%), and Ashley Jacques (3.75%). Applicant would
acquire all the interest in U.S.C., and U.S.C. would join Applicant as
one of its affiliate carriers. The current owners of U.S.C. would
retain indirect control of U.S.C. and acquire indirect control of the
affiliate carriers already under Applicant. Applicant would acquire
indirect control of U.S.C. and retain indirect control of its
affiliated entities.
Under 49 U.S.C. 14303(b), the Board must approve and authorize a
transaction that it finds consistent with the public interest, taking
into consideration at least: (1) The effect of the proposed transaction
on the adequacy of transportation to the public; (2) the total fixed
charges that result; and (3) the interest of affected carrier
employees. Applicant submitted information, as required by 49 CFR
1182.2, including information to demonstrate that the proposed
transaction is consistent with the public interest under 49 U.S.C.
14303(b), and a statement that the aggregate gross operating revenues
of Applicant and U.S.C. exceeded $2 million for the preceding 12-month
period, see 49 U.S.C. 14303(g).\1\
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\1\ Applicants with gross operating revenues exceeding $2
million are required to meet the requirements of 49 CFR 1182.
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Applicant submits that the proposed transaction would have no
significant impact on the adequacy of transportation services to the
public. Rather, Applicant anticipates that common control of the
carriers would result in more efficient and timely transportation. By
combining the pickup and delivery schedules of both companies,
Applicant states, detainees scheduled for pickup could be booked more
expeditiously on the nearest available bus or transporter, regardless
of whether the vehicle is operated by one of its existing affiliates or
U.S.C..
Applicant notes that U.S.C. brings with it a higher degree of
operational skill and experience in a unique and specialized
marketplace. Applicant says that U.S.C.'s leadership team will become
high-ranking members of its leadership team. According to Applicant,
U.S.C. has developed custom-designed, specialized software that
Applicant intends to use across its affiliates that will significantly
increase the organization's efficiency and effectiveness.
Applicant also notes that consolidation would permit vehicle
sharing arrangements, coordinated driver training, and safety
management and load sharing arrangements. Applicant claims that it is
time intensive and expensive to increase the size of a fleet due to the
necessary aftermarket customization of the vehicles, and this
transaction would improve its fleet and provide it with more
flexibility. It further claims that consolidation would allow for the
centralization of various management support functions such as vehicle
licensing, legal affairs, accounting, human resources, purchasing, and
environmental compliance.
Applicant claims that the proposed transaction would not have any
adverse competitive effect on any portion of the passenger
transportation industry. Applicant states that the vast majority of
prisoners and detainees are transported by U.S. Marshals, state law
enforcement officers, sheriffs, deputies, or local police officers.
Furthermore, Applicant states, other for-hire carriers are also in the
national marketplace. In total, after consummation, Applicant asserts
that the combined operation would constitute less than five percent of
the population being transported.
According to Applicant, competitors would not be adversely affected
by the
[[Page 41370]]
transaction, because prisoner extradition services are provided based
upon open competition among qualified service providers. Applicant also
states that there is nothing to preclude existing carriers from
expanding their routes, rates and services, and nothing to keep well
capitalized new entrants from entering the market at any time.
With respect to fixed charges, Applicant believes that assuming
control of U.S.C. would generate greater economies of scale, which
would reduce the variety of unit costs now being incurred to operate
these carriers under separate ownership. Additionally, Applicant states
that the combined carriers should be able to enhance their volume
purchasing power, thereby reducing insurance premiums and achieving
deeper discounts for equipment and fuel.
Applicant also claims that affected employees would benefit from
the transaction. It says that employees would maintain job security,
would retain or expand the volume of available work, and would have an
increased opportunity to schedule shorter tours of duty, resulting in
less time away from their home base.
On the basis of the application, the Board finds that the proposed
acquisition is consistent with the public interest and should be
tentatively approved and authorized. If any opposing comments are
timely filed, these findings will be deemed vacated, and, unless a
final decision can be made on the record as developed, a procedural
schedule will be adopted to reconsider the application. See 49 CFR
1182.6(c). If no opposing comments are filed by the expiration of the
comment period, this notice will take effect automatically and will be
the final Board action.
Board decisions and notices are available on our Web site at
``WWW.STB.DOT.GOV''.
It is ordered:
1. The proposed transaction is approved and authorized, subject to
the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
3. This notice will be effective August 9, 2016, unless opposing
comments are filed by August 8, 2016.
4. A copy of this notice will be served on: (1) The U.S. Department
of Transportation, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE., Washington, DC 20590; (2) the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW.,
Washington, DC 20530; and (3) the U.S. Department of Transportation,
Office of the General Counsel, 1200 New Jersey Avenue SE., Washington,
DC 20590.
Decided: June 20, 2016.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Tia Delano,
Clearance Clerk.
[FR Doc. 2016-15009 Filed 6-23-16; 8:45 am]
BILLING CODE 4915-01-P