Notice2026-06455
Thomas L. Hey and James A. Hey-Acquisition of Control-Minnesota Motor Bus, Inc.
Primary source
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Published
April 3, 2026
Effective
May 19, 2026
Issuing agencies
Surface Transportation Board
Abstract
In 2010, Thomas L. Hey and James A. Hey (collectively, Applicants), both noncarriers, acquired control of Minnesota Motor Bus, Inc. (Minnesota Motor Bus), an interstate motor carrier of passengers, without Board authority (the Transaction). At the time, Applicants were, and still are, the individual co-owners of Southwest Coaches, Inc. d/b/a Southwest Tour and Travel (Southwest Coaches), another interstate motor carrier of passengers. On March 6, 2026, Applicants filed an application for after-the-fact Board authority for the Transaction, to rectify what they describe as an accidental oversight. The Board is tentatively approving and authorizing the Transaction after the fact, and, if no opposing comments are timely filed, this notice will be the final Board action.
Full Text
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<title>Federal Register, Volume 91 Issue 64 (Friday, April 3, 2026)</title>
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[Federal Register Volume 91, Number 64 (Friday, April 3, 2026)]
[Notices]
[Pages 17052-17054]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06455]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21145]
Thomas L. Hey and James A. Hey--Acquisition of Control--Minnesota
Motor Bus, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: In 2010, Thomas L. Hey and James A. Hey (collectively,
Applicants), both noncarriers, acquired control of Minnesota Motor Bus,
Inc. (Minnesota Motor Bus), an interstate motor carrier of passengers,
without Board authority (the Transaction). At the time, Applicants
were, and still are, the individual co-owners of Southwest Coaches,
Inc. d/b/a Southwest Tour and Travel (Southwest Coaches), another
interstate motor carrier of passengers. On March 6, 2026, Applicants
filed an application for after-the-fact Board authority for the
Transaction, to rectify what they describe as an accidental oversight.
The Board is tentatively approving and authorizing the Transaction
after the fact, and, if no opposing comments are timely filed, this
notice will be the final Board action.
DATES: Comments may be filed by May 18, 2026. If any comments are
filed, Applicants may file a reply by June 2, 2026. If no opposing
comments are filed by May 18, 2026, this notice shall be effective on
May 19, 2026.
ADDRESSES: Comments may be filed with the Board either via e-filing or
in writing addressed to: Surface Transportation Board, 395 E Street SW,
Washington, DC 20423-0001. In addition, send one copy of comments to
Applicants' representative: Edward Fishman, Hogan Lovells US LLP,
Columbia Square, 555 Thirteenth Street NW, Washington, DC 20004-1109.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 915-4348. If
you require an accommodation under the Americans with Disabilities Act,
please call (202) 245-0245.
SUPPLEMENTARY INFORMATION: According to the application, Thomas L. Hey
(Thomas) is an individual resident of Minnesota and U.S. citizen.
(Appl. 2.) Thomas owns, and owned at the time of the 2010 Transaction,
50% of Southwest Coaches and serves as its President and Treasurer.
(Id. at 2, 5.) James A. Hey (James) is an individual resident of
Minnesota and U.S. citizen, and the brother of Thomas. (Id. at 2.)
James owns, and owned at the time of the 2010 Transaction, 50% of
Southwest Coaches and serves as its Vice President. (Id. at 3, 5.)
Thomas and James are not motor carriers and neither hold individual
operating authority. (Id. at 2-3.) Applicants' principal business
address is 1500 Travis Road, Marshall, MN 56258. (Id. at 2.)
James Schoener (Seller) is an individual who at the time of the
2010 Transaction was residing at 1550 Falcon Drive, Fairmont, MN 56031.
(Id. at 3.) Prior to the Transaction, Seller owned 100% of Minnesota
Motor Bus. (Id.) As a result of the Transaction, Applicants acquired
from Seller 100% of the issued and outstanding stock of Minnesota Motor
Bus through a stock purchase agreement. (Id. at 5.) Applicants each own
50% of Minnesota Motor Bus and jointly control the carrier. (Id.)
Minnesota Motor Bus has continued to operate under the same name and
has provided substantially the same services under the ownership of
Applicants as it provided prior to the Transaction. (Id.)
Applicants describe Southwest Coaches as a Minnesota corporation
incorporated on August 26, 1965, with its principal place of business
in Marshall, Minn. (Id. at 5-6.) Southwest Coaches has historically
operated as an individual-owned or family-owned passenger
transportation business and ownership changed hands several times prior
to being purchased in 1988 by Marvin Hey and Janet Hey (Applicants'
parents). (Id.) In February 2000, Thomas and James acquired Southwest
Coaches from their parents. (Id. at 6.) Southwest Coaches operates as
an interstate motor carrier of passengers subject to the jurisdiction
of the Federal Motor Carrier Safety Administration (FMCSA) pursuant to
authority issued in Docket No. MC-140554; U.S. DOT No. 153686. (Appl.
at 6; Exhibit 1.)
The application states that Southwest Coaches provides school
transportation services under contract to the Marshall School District,
which it has serviced since 1965. (Id. at 6.) The Marshall School
District consists of 7 public schools along with 3 non-public schools,
has approximately 3,000 students, and the service area encompasses
``162.9 miles.'' \1\ (Id.) The contract service that Southwest Coaches
provides for the Marshall public schools involves approximately 25
full-sized school buses that are used for transporting students to and
from school and conducting extracurricular trips. (Id.) Southwest
Coaches also utilizes approximately 6 smaller buses and 7 vans to
transport preschool and special-needs students. (Id.) Southwest Coaches
also served the Jackson County Central School District between 1991 and
2018, but it no longer maintains this contract. (Id.)
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\1\ The Applicants use the term ``miles'' throughout the
application, which is a measure of length, not area. Likely the
Applicants intended to use the term ``square miles.''
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According to the Applicants, Southwest Coaches also provides
charter services for a range of educational institutions, including
elementary schools, high schools, and universities. (Id.) In addition,
Applicants state that Southwest Coaches provides motorcoach services
for private events, such as weddings and bachelor/bachelorette parties,
and for coach travel tours. Southwest Coaches serves customers
primarily in Minnesota, North Dakota, and South Dakota, but from time
to time it also operates trips in other states. (Id.) In the past 12
months, Southwest Coaches has conducted approximately 250 interstate
trips and approximately 40% of its revenue is derived from these
interstate trips. (Id. at 6-7.) Applicants further state that its
customer base is made up of approximately 30% from the Marshall School
District service, 30% from universities, 35% from tour companies, and
5% from youth groups. (Id. at 7.) Southwest Coaches has a fleet of 8
motorcoaches and 34 school buses. (Id.) It operates primarily from its
Marshall, Minn., terminal. (Id.) The company has approximately 55
employees, including 45 drivers and 10 other employees. (Id.)
Applicants describe Minnesota Motor Bus as a Minnesota corporation,
headquartered in Minnesota, and a federally registered interstate motor
carrier of passengers. (Id. at 1.) Minnesota Motor Bus holds interstate
carrier operating authority under FMCSA Docket No. MC-764429, USDOT
Number 209770). (Appl. at 3-4; Exhibit 1.) Prior to the Transaction,
Minnesota Motor Bus was controlled exclusively by Seller, and following
the Transaction in 2010, it has been controlled jointly by Applicants
as co-owners. (Id. at 3.) Minnesota Motor Bus is primarily a school
transportation provider, providing general and special education
transportation to and from school on regular routes under contract to
the Fairmont, Minn., school district. (Id.) The Fairmont Area School
District consists of 3 public schools along with 4 non-public schools.
(Id.) The district has approximately 2,100 students and encompasses a
service area of ``175.1 miles.'' \2\ (Id.) The contract service that
Minnesota Motor Bus provides for the Fairmont Area Public Schools
involves running approximately 17 full sized school buses that are used
for
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transporting regular education students to and from school and for
extracurricular trips. (Id. at 3-4.) Minnesota Motor Bus also utilizes
approximately 5 smaller buses and 4 vans that transport preschool and
special needs students. (Id. at 4.) Minnesota Motor Bus has serviced
the Fairmont Area School District continually since 1979. (Id.)
Minnesota Motor Bus also provides school charter trips for
extracurricular activities and other special events within Minnesota.
(Id.) On limited occasions, these charter services have involved
transportation across state lines into neighboring states. (Id.)
Minnesota Motor Bus also provides charter bus service for university
and youth groups, transporting them to sporting events and similar
activities within the state of Minnesota and across state lines,
primarily into Iowa and South Dakota. (Id.) Minnesota Motor Bus does
not conduct regularly scheduled motorcoach service in interstate
commerce. (Id.) Minnesota Motor Bus conducts approximately 40
interstate trips per year, which is minimal in comparison to its
overall intrastate school transportation operations. (Id.)
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\2\ See infra. note 1.
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According to the application, approximately 10% of Minnesota Motor
Bus's revenue is from interstate operations. Minnesota Motor Bus's
customer base is comprised of approximately 40% from the Fairmont Area
School District service, approximately 40% from providing charter bus
service to universities in the Fairmont service area, and approximately
20% from providing charter bus service to youth groups in the Fairmont
service area. (Id.) Minnesota Motor Bus operates a fleet that includes
2 motorcoaches and 22 school buses. (Id.) It operates its fleet
primarily from its Fairmont terminal, with additional terminals in
Northrup, Minn., and Ceylon, Minn. (Id. at 4-5.) Minnesota Motor Bus
employs approximately 30 drivers and has approximately 31 total
employees. (Id. at 5.)
The territories primarily serviced by Minnesota Motor Bus and
Southwest Coaches do not overlap, as they are located 120 miles apart.
(Id. at 7.) Minnesota Motor Bus provides service in the Fairmont area
and Southwest Coaches provides service in the Marshall area. (Id.)
Minnesota Motor Bus's main competitor for charter or tour
transportation is Reading Bus Lines, whereas Southwest Coaches' main
competitor for charter or tour transportation is Thielen Bus Lines.
(Id.) There are approximately four other direct competitors in each of
the service areas, and the competitive landscape has not materially
changed since the Transaction in 2010. (Id.) Both Minnesota Motor Bus
and Southwest Coaches generally face competition from national,
regional and local bus providers operating within their respective
service areas or within Minnesota or neighboring states. (Id.) In
addition, both companies face considerable competition for
transportation services from other modes of transportation including
airlines, intercity passenger rail or commuter rail services, and
private motor vehicles. (Id.) Applicants explain that, other than
Southwest Coaches and Minnesota Motor Bus, there are no other
affiliated carriers with Board-regulated interstate passenger
operations within Applicants' control. (Id. at 8.) Applicants state
that they now understand that a control application should have been
filed with the Board prior to their 2010 acquisition of control of
Minnesota Motor Bus and thus are seeking after the fact authority for
the Transaction, (id. at 7-8). See 49 U.S.C. 14303(a)(5).
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 from the proposed transaction, and (3) the interest
of affected carrier employees. Applicants have submitted the
information required by 49 CFR 1182.2, including information to
demonstrate that the transaction is consistent with the public interest
under 49 U.S.C. 14303(b), see 49 CFR 1182.2(a)(7), and a jurisdictional
statement under 49 U.S.C. 14303(g) that the aggregate gross operating
revenues of the involved carriers exceeded $2 million during the 12-
month period immediately preceding the filing of the application, see
49 CFR 1182.2(a)(5). (See Appl. 10-13.)
Applicants state that the Transaction has not resulted in any
significant changes to the nature or scope of the general operations
conducted by Minnesota Motor Bus or Southwest Coaches. (Id. at 9.)
Applicants assert that the Transaction has not produced adverse
competitive effects in any relevant geographic market and has not
impaired the adequacy of transportation to the public. (Id. at 9, 12.)
According to the Applicants, the school transportation services that
Minnesota Motor Bus and Southwest Coaches each provide are under
contract to different school districts in different service areas that
are 120 miles apart, and there is no overlap in the school district
service areas or routes served by Minnesota Motor Bus and Southwest
Coaches. (Id. at 9.) In addition, Minnesota Motor Coach and Southwest
Coaches provide charter service to other customers in distinct service
areas, with Minnesota Motor Bus operating in the Fairmont area and
Southwest Coaches operating in the Marshall area. (Id.) Applicants also
state that Southwest Coaches' service to tour companies is in a market
in which Minnesota Motor Bus does not compete. (Id. at 9-10.)
Furthermore, both carriers face substantial competition for charter and
special-trip service from other bus providers, including national,
local and regional, and from numerous other modes of transportation.
(Id. at 10.)
Applicants state that the Transaction did not result in fixed
charges that adversely affected the ability of Minnesota Motor Bus or
Southwest Coaches to continue to provide safe and quality
transportation service, and states that Minnesota Motor Bus was
acquired by the Applicants individually, by and through their own
personal financing. (Id.) Applicants assert that the Transaction has
not had any material adverse effect on employee or labor conditions.
(Id.) Applicants state that they are not aware of any layoffs, adverse
changes to wages, benefits, or working conditions as a result of the
Transaction, and Applicants note that the Transaction also allowed
Applicants to expand and hire additional drivers and employees. (Id.)
The Board finds that the Transaction as described in the
application is consistent with the public interest and should be
tentatively approved and authorized after the fact. 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. 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 in this proceeding.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available at <a href="http://www.stb.gov">www.stb.gov</a>.
It is ordered:
1. The Transaction is approved and authorized after-the-fact,
subject to the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
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3. This notice will be effective May 19, 2026, unless opposing
comments are filed by May 18, 2026. If any comments are filed,
Applicants may file a reply by June 2, 2026.
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 General Counsel, 1200 New Jersey Avenue SE, Washington, DC
20590.
5. This notice will be published in the Federal Register.
Decided: March 28, 2026.
By the Board, Board Members Fuchs, Hedlund, and Schultz.
Stefan Rice,
Clearance Clerk.
[FR Doc. 2026-06455 Filed 4-2-26; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on April 3, 2026.
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