Prisoner Transportation Services, LLC-Control-U.S. Corrections, LLC D/B/A U.S.C., 41368-41370 [2016-15009]

Agencies

• Surface Transportation Board

[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