and in addition to that i want to make certain that we have taken all appropriate disciplinary action here. >> with respect to the most recent accusations, i have never acted inappropriately with anyone. period. >> with hundreds of hours of new public affairs programming available each week, the c-span video library is the online resource to find what you want, when you want. indexed, searchable, shareable. it's washington your way. >> next, a panel of federal and state appellate judges give their insight into the judicial decision making process. they discuss the impact of the high volume of cases on their dockets and their role in the checks and balances process. they spoke at this year's meeting of the appellate judges' education institute. this is a little over an hour.

[inaudible conversations] [inaudible conversations] >> good morning. morning, and welcome, everyone, to our panel discussion inside the judicial sanctum, the art and science of judicial decision making. i'm program chair for the council of apell hate lawyers. in their book, "making their case: the art of persuading judges," justice scalia and brian garner write: leaving aside emotional appeals, persuasion is possible only because all human beings are born with a capacity for logical thought. the most rigorous form of logic and, hen, the most persuasive is -- [inaudible] and yet justice holmes famously wrote, the life of the law has not been logic, it has been

experience. the felt necessities of the time, the prevalent moral and political theories, institutions of public policy about our unconscious, even the prejudices which judges share with their fellow men have had a good deal more to do than the -- [inaudible] in determining the rules by which men should be governed. so which factors dictate judicial decisions? is it logic, is it experience, or is it a combination of both? to help us answer these and related questions, our panel today includes judge eugene pigott jr. of the new york court of appeals, that state's highest court; justice mark martinover the north carolina supreme court; judge brett kavanaugh, u.s. court of appeals for the d.c. circuit, and chief judge edith jones of the u.s. court of appeals for the fifth circuit. our moderator today is kirsten castaneda, she is senior counsel

at locke did el llp, she was a hatten w. sumners scholar, and she's a member of the executive board of the council of appellate lawyers. please join me in welcoming this outstanding, distinguished panel. [applause] >> thank you so much for being here today with us for our talk about judicial decision making. before we begin on this veterans day, i would like to take a moment to remember all those who have served our country in the u.s. armed forces and all of our men and women in uniform today. thank you for your service. [applause] i want to start with a question to kind of bridge between lawyering and judging. before you became a judge when you were a lawyer, as a lawyer

before you went on the bench what didn't you understand about how judges make decisions, chief judge jones? we'll start with you. [laughter] >> that was so long ago, i hardly even remember it. what did i not understand? i did not understand the impact of personalities on the collegial decision making process because on a multi-member -- please, forgive me, i've got -- i'm better today than i have been with this laryngitis -- on a multimember court you have people with decidedly different life experiences and profession aleck appearances -- professional experiences and legal experiences each of which has something to contribute on just about every case that comes before us. and, therefore, when you sit on a panel particularly when you're sitting with people repeatedly year after year, you become like

a, you know, cohesive group that understands where each person is on various issues. and that contributes to a much more unified product than, you know, you would think would be the case with a single person signing an opinion. that's not all that person's opinion, that is a product of the majority that the person is working with. >> judge kavanaugh? >> i think two things. one, the importance for judges of moving the docket along, deciding cases and keeping, keeping everything moving means that judges are very interested in efficiency, and it also means from the lawyer's perspective that issues like waiver and concessions and oral argument are things that judges are going to be very interested in because if case, if issue's waived or

you've conceded away the case, then that's one less thing the judges have to decide in a finite period of time where there's a lot to decide. so that's very important. and second, picking up on what chief judge jones said, the collegial process of a group coming to a decision leads to a group input into the opinion. and so when i used to read opinions as a lawyer and i said, boy, that footnote makes no sense or, gee, that first point and the second point are intention, i now understand much more about how that might have been put in, because another judge wanted that put in, and it was a condition of joining and working together to try to get a group product sometimes leads to not just a collegial process, a consensus product, but a consensus product sometimes can lack the clarity than what you would have if it were just one

judge. >> judge martin? >> i'm actually going to use the term "synergy." it's been very interesting to me that when you have an appellate panel or court working properly, it's amazing to me that as you have the interaction among the judges, you truly have an opinion that is far -- the product of that collegiality produces an ultimate opinion that is far better than any individual member the court could produce. and i think that's important for attorneys to understand is that the more they can engage members of the court at argument, the more they can be cognizant of the individual judges or justices' prior opinions in an area. it can really give you insight as to where the process can lead. the other thing that's been very impressive during my 19 year on the bench is how important the

judges consider their role when they decide cases. they know that they are not executive branch officials. they are very aware of the fact that they are not legislators. and in the backdrop in every session i've ever been a part of, you can just tell that judges are very influenced by the unique role they have in the tripartheid system. >> i was a trial lawyer for about 25 years before i went on the bench, and i've been on the appellate courts of new york the last 13. the one thing that when i got a dig from an appellate court when i was a lawyer, i turned to the last page, and if i won, it was great. if i lost, it wasn't. [laughter] and if i lost, i wasn't going to read it, and if i won, i'd take my time and read the wisdom these judges were happening down. [laughter] the one thing i do -- a little bit of transference, i was always reminded by my mentors and others that when you're a lawyer, you may have 100 cases.

your client has one. and your client will take their kids out of school, they will change vacation, they will modify -- they will think about you and what you're doing for them at times when you're not thinking about them. and it's important, i know you know as lawyers, to keep in mind how important it is to your individual client even though you have many more. it's the same thing with judges, i think, and particularly on the appellate courts. you have one case, and it's important to you, and you're bringing it up, and you're trying to get our attention. and it's important for us, it seems, to remember that. we may have 200 cases, you have one, and your case is as important as every ore case -- other case that we're going to see in a given session. and i think when you have a bench that keeps an eye on that and focuses on each case individually, t a good thing. and when it's not, it can be trouble. and i think -- i was on the intermediate appellate court for a number of years before i came

to the new york state court of appeals, and as quickly as the appellate judges try to get their cases if and out, i don't want to say they get missed, but we have the duty, i think, of when there are cert applications not to sort those out and remember even though in the appellate courts they have 2,000 cases, you have one. so a little bit of that transference to remember that we're not dealing in volume here regardless of what the volume is. >> i'm interested to talk talk a little bit about how discussions, talked about the synergy and the interalaskas with judges, how other judges impact your decision making. judge caf nag, wanted to start with you. did you ever speak with other judges before submission, what's your post-submission conference like? >> we typically to not speak with one another before the oral

argument. so the oral argument's the first time that i'm learning what my fellow judges might think about the case. and that's important for the lawyers to understand because you're getting in the middle of a conversation that is starting among the, in our case, three judgements on our appellate bench. so that conversation will start, and i'm learning at oral argument, oh, my colleague has an interest in this. i need to think about this. and that conversation will then continue at our conference which follows the oral argument where we discuss how we tentatively want to decide the case. and oral argument, what the lawyers say but also what my colleagues say at oral argument and the conference afterwards really does sometimes change your mind, certainly refine your thinking, change how the opinion might have been been written. so it is, to underscore what's been said, a collegial process where the final product really does reflect the outcome of what

you're learning from your colleagues. but the important thing to remember as a lawyer is that conversation is starting among the judges at oral argument, and you want to be part of that conversation if you could. >> judge martin, could you add to that? >> well, it's really interesting. i served on two appellate courts, on the intermediate state-level appellate court we had three-judge panels that changed each month. and currently on a seven-member state supreme court. to me, what's been really interesting is how the dynamics can be so different based upon the number of members on the panel or on the court. and so when you think about the continuum within the united states, you know, the three-judge panel of up to the nine-member state supreme court situation or, of course, the nine-member situation in the u.s. supreme court, the relationships among the judges when the it's the same group every month, it's like they move

in time together in tandem. and as judge kavanaugh indicated, we take great care to not talk about the cases before we hear from the lawyers at argument. but after that takes place and we have a preliminary consensus or vote on how the appendage should be decided, at that point you begin to see opportunities for the entire court to talk on subsequent occasions about a case. but also you'll see where you can have individual conversations maybe with just two justices or a greater number. and many times that process can be impacted by whether you have a division among the court, whether you're going to have in addition to the majority opinion possibly a concurring or dissenting opinion. and so i would say that the larger the court you have a larger number of people who are trying to come together and form a consensus. so from the adversarial standpoint, keep that aspect in

mind. the larger number of judges you have to deal with, the more you really need to take care that each of those members of the court feel like you've engaged them in the argument, that you've engaged them in the decisional process. >> now, when there is a concurrence or dissent involved, how does the process differ, or what's the process like in terms of dugs among the judges -- discussions among the judges? do you have oral discussion after conference, or does a lot of the interchange happen when opinions circumstance hate? chief judge jones? >> i'll step back a second to the last question because in our court most people do not discuss the cases before we go to oral argument. but i don't see any problem in doing that occasionally. you can highlight a fact or an issue that is of particular concern to one or both of the other colleagues. and this comes out sometimes when the court sends a question out to come before oral

argument, mean that someone has located an issue that we're really concerned about or a recent case that counsel really need to comment on. those should be taken very seriously. as for the concurrence and dissent process, after you discuss a case after oral argument, um, the different shades of opinion will begin to show up and how to approach the case, what issue is important, whether an issue was properly raiseed in the district court -- raised in the district court and so on. and the writing judge has the responsibility to try to fashion an opinion that appeal the panel -- that will appeal to the panel. depending on the depth of the disagreement, however, the writing judge may know that another panel member is going to write a dissent and, therefore, quite often you write with an eye to anticipating some of the dissent issues. i recently had a case that

pended for quite a long time, and i wrote a majority opinion, but i had, in fact, to write two or three opinions in order to get another colleague onboard and then to respond to some issues that another colleague had raised in dissent. so it can be pretty involved. >> justice pigott? how does that process work with your court? is. >> about the same. we don't talk -- it's funny, in the appellate divisions, and there's four of them in new york, the judges, it seems to me, always pull more in harness, and they're much more prepared at the time of oral argument -- i shouldn't say prepared, but they tend to know where they're going as an appellate court. we, like the rest, don't talk about the cases beforehand. we're going back next monday, and i'm very excited. i can almost guess where some of my colleagues are going to be at some of these cases. and i, of course, have worked on them with my law clerks. and we have a rather staid

traditional process of who reports a case in the, in conference, and then who ends up should there be a dissent, who talks, in what order and then depending on where everyone is lining up, who writes the majority, wrote writes the dissent and if there's a concurrence or not. so it's a rather arcane process who goes back to, i think, john jay who was our first chief judge. i think he started all of that. [laughter] >> one thing that i'm interested to know is whether you consider the broader implications of a case, the broader implications of a holding maybe unintended consequences if no one is talking about that in briefing or argument? just as a normal part of your judicial review, judicial decision making, do you consider that? chief judge jones? >> it depends on the case. some cases are clearly tickets for this day only where the issue is not, well, when the

issue's not well presented, when the case is just -- i don't want to tell you about one we just had, but -- [laughter] clearly, it's sort of a grudge case and, you know, i have a strong resistance as to near hi all of my colleagues -- as do nearly all of my colleagues to try to make mountains out of molehills legally. we do not pride ourselves in taking a small case and turning it into a matter of great importance unless it really, really is a matter of great importance. but, um, yeah, we have an eye to ramifications. but i'd say at least as often we have an eye to the narrowness of the dispute before us. there are and when we do have the cases that present broader implications, we like to see the lawyers broaden their focus beyond the fifth circuit, tell us what the other circuits are thinking about. or when there are splits among

the circuits. because that helps us in our decision making process. >> when i'm deciding a case, i'm always thinking about the relevant text of the statute or regulation or constitutional provision in front of me. i'm always thinking about the precedent. we live in a system that's governed by precedent, and with each particular issue we're going to have a body of precedent we have to operate within. at the same time, i am very cognizant that the decision, the opinion we issue will set forth a rule of law that has to, that people will rely on and will try to apply. in our case, our court has a lot of administrative law cases, so a lot of federal agency action will depend on it. and i am very concerned with trying to set forth an opinion that is marked by clarity and workability in terms of what's going to happen. so will people know what the role is, and will this really

work in the real world and, therefore, in turn i'm looking from the lawyers at oral argument and in the briefs, what is the big picture here? how does this case fit in to the big picture in telling me the overall context of if your rule prevails, how will this all work? and that's very important to my dig make -- decision making and especially important to my approach to opinion writing recognizing that people for years, potentially, could be trying to figure out, well, what did that mean? and how do we live under that opinion? and the more i can anticipate that and provide a clear role, the better i'm doing my job, so i really try the work on that. >> i want to address this from the perspective of the appellate lawyer. i think it's critical to understand the, where the court that you are handling your appeal, how does it fall in the

tiers. is it a first tier appellate court, is it a second tier appellate court? so having serve inside the two tiers in my state, our first tier is much more concerned with error correction and has much larger mandatory jurisdiction docket where litigants are there via a statutory notice of appeal process v a right to bring their appeal this. when you get to the second tee tee -- tier and you see a greater docket, of course, the ultimate example of that is the u.s. supreme court. on state supreme courts you have varying degrees of mandatory jurisdiction versus discretionary jurisdiction, so the more the docket cases where the justices actually made a decision as to whether to hear the case, you're going to see public policy being a larger part of the decisional process. obviously, that case was elected for review because the court was

concerned about the significance of the jurisprudence for that issue, potential conflict between the lower court decision and one or more of the decisions of that court. and then finally, you have public interest aspects that can enter into it. and so i think that if you have a case where the court did not have to hear your appeal and you've made it through that round of determination that the court will order a full briefing and argument, always be concerned about the broader implications of your appeal. that does not mean that if you have a case on point, of course, how off will the case -- how often will the case be selected for review under that situation, and how often it's more typical that there's a degree of gray area here. and so the the court is going to be highly interest inside the impact of the resolution of this case on the aspect of the legal

landscape. >> we're a cert court, so we get a lot of situations where on the leave application the suggestion is that there are no implications beyond these parties. and if that's true, then generally we won't take it even if there's recoverable error. so as judge martin's saying, if it's, if we take it, it's usually because we're more interested in the broader implications of the case. we do get some sent up from the appellate divisions themself which is always interesting because it's important to them. the best advice i could give when they're coming to our court, if there's a division between the appellate decisions, that's great news because we're always trying to straighten them out -- [laughter] to see if we can get them to agree. >> all right. from the broader to the more obscure. when a case involves scientific or technical concepts with which you're unfamiliar and you haven't run into them before,

how do you become informed? do you rely solely on the brief? do you read the cases in more detail or the record? do you go check that? do you perform any independent research to figure out just the basic scientific concepts? how do you approach that when it comes before you? and let's start with justice pigott. >> i generally rely on the litigants, and let me make a suggestion or thought here because i made this mistake all the time when i was a lawyer, and that's relying on the medical records and what the medical records say. i put in there that a lawyer did a baa bin sky test was -- which is tickling the bottom of your foot, by the way. [laughter] when you get them and we're trying to decide these things, we don't know that stuff. and i think that lawyers that take the time to realize that these lawyers probably don't know any more medicine than i do or about the coefficients of friction than i do, to explain those and tee them up better is

a great idea. we don't have a lot of time, nor do we have a lot of inclination, at least in my experience, to go educate ourselves on many of these things because we're trying to focus on the law. and what you can do is defeat yourself without even knowing it by allowing a judge to say, well, i don't know what he's talking about here, but that doesn't fit within the case or something and you find yourself losing because somebody's too lazy to go read the science which is probably me or someone else. [laughter] so i think it's a good idea to, you know, not count on us to go do it and do it yourself. >> judge martin. >> this issue creates quite a challenge of the legal system. on the one hand, we want our judges well informed about science and other areas before making decisions that will have such a great impact. on the oh hand -- other hand, to the extent we have judges independently, you know, on the internet or anywhere trying to

learn science themselves, it creates situations where the advocates don't really have a meaningful opportunity to be a part of that process. so i think i'm saying all of that to emphasize to counsel that it's very important for appellate lawyers not to make too many assumption ls. and you've been working with that case for some period of time. if you just handled it on appeal, maybe not multiple years. if you've handled it the whole time, you intimately know about the case. and sometimes we begin to make assumptions that, well, everybody knows some of the presuppositions or basics that i've taught myself. but that's not necessarily going to be true. and make sure that you don't assume that the judges know everything about the field of science that is going to be relevant to the resolution of your appeal and try to walk through the basics in your brief. maybe you'll end up footnoting some of that information or referring the judgement to a safe source for more examines, but -- examination, but be

cognizant of the fact that the judges are not necessarily always going to have the same degree of expertise as you have in this scientific field. >> well, i think your question raises more broadly the point that we're generalists as my colleagues have been saying. we're dealing with a huge range of issues on a daily or weekly basis at oral arguments, and the lawyers are experts. and it's the job of the best appellate lawyers to bridge the gap and to bring their expertise to a level where a generalist is dealing with a lot of different issues a week can understand it. and that's a skill to be able to communicate this complex issues. it may be a body of law, it may be a scientific concept, but to communicate and break that down into a way that a generalist can pick up on very quickly. we would like to become experts in everything, but that's, that's the goal, but you're going to have spent months or

years on something that we're going to have a 45-minute, one hour oral argument on. and it's a challenge, but also a necessity for you to bring the case into the level that a generalist can appreciate it. >> i don't have much to add except a quip and a caution about foreign law because, as you know, in the federal courts foreign law is a proof of fact to be identified by use of expert testimony and extrinsic sources. and we've had a couple of cays where the parties -- cases where the parties have been really pretty deficient in teeing up foreign law for us in a way that we thought was sufficient. and the court of appeals under rule 44.1 reviews this de novo and is entitled to go out on our own which i'm sure most of you

counsel would not like us doing. [laughter] and my general quip on this area is one of our judges often says, put it down where the little goats can eat it. [laughter] >> when, when the lawyers are trying to get these specialized concepts across and to educate and help, one thing that's tempting these days with the advent of technology and -- not advent, but the continuing development of it is to cut and paste thing from the record, photographs of a scene or a diagram of the machine that's involved. when those things are put into a brief, in the course of a brief as opposed to being attach inside an appendix, do you find that helpful to the ec tent you run across it, or does it come across as kind of gimmickry and like you're just trying to use the new pdf program you got at

your office? [laughter] anyone can take that. >> i love it. i like -- all i don't have you look like you're athletic or at least understand sports. [laughter] one of the things that i want to mention to you is that everybody looks at the rules of the court and know 'em. but you don't go play tennis, golf, baseball saying i've got the rule book here, and the rule book say -- and then you make sure you don't do that. if you look at the starrs in any sport, they know the rules but then play the game. ..

>> i think you've done yourself a great service. and i think if you focus on the idea of getting your point through these judges, and you focus on it, i think it's very helpful. >> howell has electronic briefing affected the way -- how has electronic briefing, analyze the case, take a look at things. one mention footnote earlier, and there have been comments of other judges that footnotes a lot of times are not very helpful in electronic brief because you have to scroll down screens and then scroll back up to see them. has electronic briefing impacted your review in any way? >> well, our court just

purchased ipads within the last six months, and among the uses that we have for the ipads is that you can download all of the briefs in the record excerpts. and has enabled me to prepare for the nhs for oral argument by reading things online, still getting used to it, but i found that aspect of the electronic device is very helpful. i've not had a problem with footnotes anymore than they would ordinarily have a problem with people who try to stuff the argument into the footnote -- [laughter] or tried to distinguish the opponents argument only in the footnotes. so i'm going to read them in any event, but, in fact, we've been talking about, i'm sure some courts have done this, allowing lawyers to hyperlink cases in briefs someday, which will be a

real step forward, but i don't see a systemic change in approach based on electronic devices. >> i think we're using a lot more as chief judge jones says, but i like her don't think yet i can see how it is changing how we go about things, other than it is easier to read on, lugging the briefs on a plane or train, it's a lot asia not have access to them at all times. but in terms of how that will change decision-making, i think it won't other than make us more efficient, which i said at the outset is an important value that we all have, which is getting to be as efficient as possible getting our work done. >> like chief judge jones, we now have ipads, and i brought mine with me on this trip since i've argument on monday. so i think it has facilitated

the judges being able to better prepare for argument. let's be very practical. everyone in the room has used computers, has use ipads. i think the real challenge for judges that are preparing in that way is when a comparison of two documents decide each other would be helpful, and under those circumstances, think of the way you can help the judge see the collateral matter and still be a part of the briefs. maybe there is an excerpt or some degree of a document that needs to be folded. but just keep that in mind when sometimes there are limitations and how the electronic media can be utilized when you start comparing different documents. that's an area of challenge i think that we haven't yet fully solved. i think hyperlinks in some of the suggestions that chief judge jones has said will be beneficial once as perfected. >> i think most of my colleagues -- we have electronic mandatory electronic filing reads and

records. the one thing i like about it is in because i used to complain about the fact that record on appeal come in and sometimes the way they were bound it was hard to read some of the documents, and that's been cured because they're all there electronically. but in terms of getting to the briefs and records and stuff, we are still struggling. we need ipads i guess. [laughter] i've got a flash drive in my pocket, as far as i've gotten. but it's coming obviously. you folks are well in advance of us. but i will keep in mind that you're getting with judges who grew up with pencils. [laughter] >> talk about the materials you are reading when you are doing your review and preparing for argument. when you pick up the materials and start fresh on a case, or at any point in the process, do you look to see who the trial judge was or who the judges were on the panel below? the author may be more obvious

if it is a lower court opinion, but do you look and does that impact your decision making at all? >> yes and yes. [laughter] >> i always look at -- [laughter] >> i'm not sure. on the effect. i think i look at the substance of the issue and try to get into, you realize certain charges habits or reputations for certain things, so you are aware of that, but ultimately you're deciding the issue based on your own evaluation. now, if it's a abuse of discretion review or something like that, i guess one can say you're looking at how this judge handled it and you may be aware that this judge has made some more mistake in the past or something.

you are aware of that. i'm not sure i can quantify it actually has impact. >> well, i guess i would like to think that for the rule of law to work appropriately, as between various courts and structures for a few, then you really don't want to focus on who authored the lower court opinion, or who may have been on the panel. so i think it's a general rule, you just try to not consider that. i do think that sometimes as judge kavanaugh said, you may have a discretionary ruling or particularly close question where, at the end of the day you were wondering, you know, is this really an affirm us or reversal. so i think it only helps in a positive way at time, or at least would apple even have one of those old boy situations and you know you have very talented and experienced judge at the lower level, that you might tend to give it a little more of the

doubt before reversing that decision. >> in immediate appellate courts look at them all the time. when i was on the department which is in rochester and is as much of new york on you know all the judges. sase the cases come. the immediate appellate courts have much more power than the court of appeals. they have interest of justice, jurisdiction. they have that fine jurisdiction. and so it is important i think when we were doing that to know who the judge was. and you have respect for some, you have respect for them all -- [laughter] you have more respect -- and it can have an impact when you're in the discretionary field. in the court of appeals we tried, there are 1300 trial judges in new york. i don't know the ones down in manhattan. i'm from buffalo. but i know them, and my colleagues from new york city don't necessarily do. so it's nowhere near as important when you get to i think the highest court, but in the immediate i think it's very

important. and all of you know that, and i think you probably spend as much time as you need bringing forth the judges when you're making your appeal. >> when you have an appeal that has a lower court opinion, whether it is from a district court or an intermediate court, do you start with a lower court opinion, or do you start with the appellate brief for petitioners brief? or defense go back and forth? interested in how that has been played? >> i start with the court decision and i outlined. and then i do the same thing with the appellate one, and then they go to the appellant's brief. one of my colleagues, that idea with that i just know how he does it, he goes back to the original papers and he tries to sit as if he was the judge and how he would decide it. but i generally do that because

it's an issue narrowing exercise, and then when you look at the appellate brief, hopefully they correspond any issues you felt were important and you go from there. that's what i do. >> well, i always try to start by reading the appellant's brief. the party who took the action to bring the issue to my court. and once i've read the appellant's brief, tried to get a sense of the theme of the appellant's, the theory of the appellant's, then i go and read the brief of the party was trying to uphold the lower court decision. how they responded to the assertions made by the appellate. and then finally, usually in before i go and look at the record at that point i will go and look at the lower court decision to see what's bond the story to my court. so through that process, and once i've look at that decision then i will go look at the

pleadings, the record, just to get a better sense. i think everybody on this panel are always aware of the fact that behind every case are real people. and that story cannot be fully told until you have examined all relevant documents. >> i will use a look quickly at the appellant's brief to see what the issues are and then go back to the district court opinion. it could be the case they addressed six issued on two of them are on appeal. if you start with the district court opinion might miss that pigs are usually take, see what the issues are and then use that to focus in on the district court opinion. but that's a very important starting point in my thinking about the case, of course if someone else a judge he took the time to go through the whole case and spend a lot of time on it and wrote an opinion. that's a quickly important part of my thinking, decision-making process. >> i agree with brett that i go

about it the same way. i look at the issues on appeal, and i look out the lower court opinion. let me just say, while it's always interesting to see which judge wrote a lower court opinion, they're all entitled to equal, the judges opinions are entitled to equal weight in our court, and a lot of them are quite well reasoned. so, we look at those very carefully. but one more point about the fact that appellate judges may occasionally be concerned about the identity of a lower court judge, counsel should never argue a case in terms of well, this came up from the famous judge so-and-so, wink wink, nod nod, very bad for him.

>> what triggers you to go look at a record before argument, if anything? >> if our court had more time we would look at a lot of the records before oral argument. now that the records are all available online, a lot of our law clerks do in fact examine the record before oral argument, although you know, i never went to fully vouch for the way a law clerk has looked at a record. but that has been a powerful tool to assist us. i didn't think it would be but it has been. when the parties can't agree on what the facts are, then you have to look at the record. that is very distressing situation, because the breeze on to at least agree on a certain universe of what happens and the trial court and sometimes they don't. >> oftentimes an issue will be raised on appeal that was raised in a different way in the lower

court. and so for me i find it useful to go back and see how this issue was portrayed to the district judge, and appellate counsel naturally, if it lost, may have a different approach on appeal to presenting the issue. but it's helpful to go back for me to look at that as well as to look at other aspects of the records are put together in the appendix of a standard part of the decision-making process to review what the parties have put together for the decision. >> i would just quickly elaborate on some of the key points that have been already in may. it's so important for counsel to make sure that, that they convey the facts accurately in their briefs. and when that doesn't happen it's always uncovered, because on an appellate court, after argument, there's a very painstaking and meticulous process to make sure every aspect of the record is examined.

so know that going into it. i think that it is an area giving us a challenge for an appellate courts because there's no way pre-argument that you can examine every record. but i think the lesson for a public council is please know that it will be examined, and so there's a difference between how it was represented in argument and what is ultimately found but it could have a very profound impact on the resolution of an appeal. >> i really like evidence. ddgs in depositions as things like that i don't read much unless you coming to the and the pleadings et cetera are there, but in terms of the actual hard evidence to i like looking at the pictures. i looking at the road -- medical records but i like looking at affidavits of experts and things like that and cd. one of the things i would suggest, this is probably a good to all of you, one of the frustrating things is when you look at photographs of someone who is photocopied a black and white photograph them or

photograph of a cold one and it looks like a rorschach test and you can't tell what the point of it was. to me gets me to the courtroom to what the actual thing is because these are the real records which the oral arguments and briefs army. i just get a kick out of it. i think that's true a number of our judges, many judges and they think they're right in doing it. will simply look at what you were saying, talk about in your brief, he does they are in law courts and have to make decisions based on the law. >> regard to the decision-making process, oral argument, you're trying to decide the case. if the case involves an issue of first impression or an area of unsettled law, how much, if at all, just plain old common sense or pragmatism factor in to you how you resolve that issue?

>> in our court, element tends to depend on the judge. and to some extent it's a matter of philosophy, on a number of levels. you can have a case that presents a novel issue, but it's a very small case, and it can be very, i would distinguish this view of pragmatism fundamentally from judge posner's view of pragmatism. to which i do not subscribe. but pragmatism can be taken on the level of is this something where the law is profited by writing some bold new rule that might or might not advantage this particular person? if it's not well, has not been well presented, has not been well presented in the lower court, i'm thinking some extent to the pro se in prison or type litigation, pragmatism can take

the form of well, and, of course, i put this in perspective, we're the second busiest appellate court in united states per judge. i think 11th -- the 11th is -- on a project basis. the ninth circuit judges that may be in attendance. so we have to move cases along, and when, when something is fact specific, maybe a commercial space you -- dispute, reasonably well handled in the trial court, the issues are unique to that case, such as the interpretation of the contract. and pragmatism suggests that you dispose of the case in a very efficient way. as quickly as possible. other pragmatism can take other forms which i'm sure that other judges will talk about him, you

know, how does the case, how much should you write, what aspect of the case should you focus on? so it's a very difficult thing to try to quantify. >> i agree with all that. i do think commonsense, to use the term you used, should play a role in how we think about how this is going to work. as i said, the interpretation of the president did issue, but how it's going to work, and, therefore, we are trying, it's going to be completely nonsensical result in the real world. that means we probably need to rethink our premises about how we're going about it. so, therefore, as an advocate, to underscore something i said before, to tell us how this all works and woodwork and different approaches to problems with the other side's position. it would mean this and this, and it would cause all these

problems. i think those things are important. again we have to make the decision the logic take but we want to be informed by commonsense, and i think everyone likes their decision to be this is right on the law and it's going to work. >> case is the first impression, that's going to be critical for appellate counsel to determine who are the arbiters, who are the decision makers, what are their life expenses, how will they be brought to bear? i have heard many, many times from colleagues this does or does not make sense, and i believe we are talking about commonsense when people are making those kinds of assessments. the other thing i would add is that once you get to a second tier, appellate court, you know, the judge's our justices are very interested in how is this particular case, how are we going to place this in the legal

landscape? how is the internal logic of the legal landscape going to be affected i this decision gets i think there's a lot of other factors than commonsense but clearly that is a variable that is considered in these first impression cases. >> i like that question. somebody once said the law is commonsense as amended by the legislature. [laughter] and i don't think kirsten gum you're asking us to say we are not a commonsense court, but we do use common sense. on cases of first impression for example, we decided court of appeals have decided gps about three years ago. what we did is decided and are new york state constitutions that we would have to be confused by what might happen later on in washington. and we said you do need a warrant, and that we -- but it was a question of first impression for us. we all have our constitutions, et cetera, that we work on. it's kind of fun at that time

because it's when all seven on our court are digging in on these issues. we did gay marriage not too long ago. and it's very spirited and of course we borrow from our federal courts and our colleague courts around the country when and if we can. >> now that we have the internet and so many ways of collecting opinions, there really is almost no such thing as unpublished opinion, and jed courts still use published opinions. how does that, if you're court uses that, how does the use of unpublished opinions back into your decision-making process? >> well, that's a very important question. all the federal circuit courts now i believe are quoted unpublished opinion, is not presidential. in our court, the courts have different rules about what that

means. and our court it means it's not to be cited for precedent except in instances of related, and related litigation over i think res judicata. that said, we do get occasional citation to federal appendix cases, even more disturbing we get citations to unpublished cases from other circuit courts, which i'm sure would be justices serving to them decided. it is a matter of necessity getting the point of decision making nowadays, most circuit court cannot keep up with a presidential by that is published and, therefore, we have to do certain things that we consider to be nonpresidential. we still try to be consistent with those authorities, but don't set too much store by them if you do have a case on point

that is an unpublished fifth district opinion, please cite it but do not expect us to treat that with the same dignity that we treat our published opinions. and in the decision-making process, sometimes we will decide initially in the case we think we can handle this as an unpublished case, which means any fact specific weight governed by clearly well-known law, and, therefore, nothing is of legal interest. but if any single judge within the court or even not on the panel can ask for the case to be published, and also the lawyers can ask for it to be published afterwards. so those are backstopped so that we would hope in part sufficient control on the unpublished parts.

>> i served on the court where every determination we have made is published. so i don't currently have that issue. when i served on the immediate court of appeal at the state level, we have most dispositions were unpublished. i think it's an area of concern in our legal system, because our common law evolves through the publication decision that deal with fact patterns. but i also recognize chief judge jones' point about the incredible number of cases. so i think what jurisdictions have to take a careful look at is how can you make sure that when council examines the facts and finds this perfect decision, it turns out to be unpublished, is there a mechanism for council to move for publication, or some other rule where that decision can be utilized in the adversarial process. >> we are a common law state that all of our decisions are

published, all of our decision in the about of all four of them are published. i think among trendy think of the volumes, and we've selected opinions from our d.c. previous court that are published, to come in a miscellaneous section. and on top of that those that are not published in miscellaneous, the trial court judges wish they had published, many of them are online. we welcome them all. mostly because we are common law. and sometimes the trial judges write some wonderful opinions on specific facts of specific issues that we find helpful, so we have no restrictions on them. >> i want to give you all the opportunity to just give us any observations you may have for us about your decision-making process, or things we can do as lawyers to help you in that process. judge kavanaugh? >> it's important to quote fairly and accurately the text.

it's important to be candid. it's important for us to be candid. it's important for the lawyers to be candid. sometimes the case, not a lot of times, my reading is 99-one, close cases, but we have to be candid about what is the better reading, and so, too, to the lawyers have to be candid about what's better reading, do not -- this goes to judges -- talking to myself but also the lawyers, do not stretch a precedent or the meaning of a statute, do not allude seize the key qualifying phrase -- [laughter] in the president which every time i see an ellipsis in the quote i any look at the case to see exactly what -- so often that's where the bodies are buried of these cases.

oh, you left out that key part. so the text is critical, quoted in full, quote it accurately. be candid with the court. literal truth may be a defense a false statement? but it's not necessary a good practice. that's not good for judges. that's a standard i set for myself. lawyers also should be aware of not trying to mislead through literal truth as misleading in context. and tone, civility is important as well i think for the lawyers. chief judge jones talked earlier about in your briefs not trashing the lower court judge. i think that's important for lawyers, and they think as a judge in my decision-making, i try to always keep the tone toward the lower court judge and toward my colleagues as respectful as i can, realizing

number one, that's the way i like to be, and number two, i think that also helps set an example for a profession that needs more civility. civility doesn't mean giving up your principles it doesn't mean giving up your position, but it does, at least for me, try to always display respect for the opposing position for the council and the lower court judge. so those are some random thoughts. >> judge martin? >> well, judge kavanaugh had a number of good recommendations to let me just try to add a few more. i think it's important, whenever possible, to develop an affirmative reason, what i will call, for why the courts should rule in your favor. and once you develop that theme, the whole focus of your document is to then give the court a

foundational blueprint or outline of how an opinion could be written in favor of your client. in cases where the president is unclear, consider developing the factors that you think the court should consider in resolving this case. because the appellate court is going to be very concerned about what guidance should be given to lower courts, to litigants for the resolution of future cases that may arise in that area. i can't stress enough judge kavanaugh's focus on civility. as the legal community we are a part of the greater society that seems to struggle with that at times. and i know in my jurisdiction that most of a public council will appear before my court again, and so be very cognizant of the fact that i'd say you want to sell as an advocate on behalf of the client at this time, but if you're planning a future foray to the court you also want to be focused on

maintaining and enhancing your credibility with that panel. >> i will make for quick point, i promise to be quick. remember, i mentioned you know the rules of the game and then you want to win. one of the things that appears in a court not as often as i would like anymore, but i see quite often, was called eliminative and, or introduction. there's nothing in the rules about that, but lawyers very effectively summarize their case in a page in half or two without necessary citing all of the record of appeal and page numbers and everything, but just to be concise presentation of the case. i find them very effective. i have photocopied the table of contents of briefs many because when i'm in oral argument when i have been in front of me to see what we are doing. so i like seeing that. i always like to see the defendant called the defendant.

not an appellate, not a appellee, not dash dash. because we both and i've got to change all back to defendant or the plaintiff in order to understand. so if you focus on the idea that you're trying to win the case, and make it readable, and to effective things. you have think more that i suggested that are effective to get your point across i think a simple. one less thing about the state of new york, love to have either come is that we are live on the internet our oral arguments, monday, you can catch us at 2:00. are live on the internet in all of our cases are archived. so if there were a case of products like billy? or something like that and you want to see what the oral argument were like, you can get them on the internet. our staff and everything are very good at this. it's all there. >> i don't have much to add to these fine comments. i would say, if they cases called for oral argument in the

fifth circuit, that is a very important decision. there's some judges on our court who, given the chance, would here dashed others have different views of thing. so we do not set cases for oral argument lightly and, therefore, that means essentially that the appeal is up for grabs. that gives a very important opportunity for council to make the best case. therefore, you would think that most council would prepare very seriously for oral argument. and i say and about 80% of the cases they do. it is a matter of consequence in our circuit, and really does assist in our decision-making. so briefs are certainly important, but so is the oral argument. and please, focus on two things. number one, the record. you need to know the record, even if you're appellate counsel, you need to know what the trial court did as if you

had been there yourself. and number two, focus on what your best case is here quite often judges are confronted with good briefs that have many, many authorities. it's is going to throw up his hands on her hands before preparation and say well, what is the important case here? so, tell us your best case and fast forward immediately. >> we want to thank you so much for your time and sharing with us your thoughts about judicial decision-making. and thank all of you for joining us for the discussion. it was great. [applause] [inaudible conversations] >> just had a senate hearing on how the economy is affecting native american communities. later the senate is back at 2 p.m. eastern for an hour of general speeches.

>> between 70 and 80% of native americans are living on reservations are unemployed. business owners discuss how federal development funds can help to improve tribal economic issues. this hearing between the senate banking committee runs about 90 minutes.

>> good morning. i'd like to call this hearing to order. during my time in congress, i have enjoyed a strong working relationship with american indian tribes in south dakota and around the country and have advocated for policies to help improve the quality of life for american indians. while progress has been made, many native communities continue to face significant challenges, including staggering unemployment rates, inadequate health care, crowded and unsafe housing conditions, high crime rates, and educational inequalities. this is unacceptable. fostering small business growth is a vital step toward increasing employment

opportunities and improving local economies throughout the country during these difficult economic times. small business growth in indian country is no exception. encouraging the startup and growth of native american owned businesses is an important priority to me as chairman, and that is why i have called this important hearing and invited all of you testified here today. for many years, i have worked to ensure native communities in south dakota, and across the country, have adequate infrastructure in place to foster an environment where economic development can take place. from being an original cosponsor of the legislation that created the nahasda block grant for housing to helping fund the mni wiconi were a water system to

supporting tribal bus transit programs. today, the committee will examine what challenges continue to hinder economic growth in indian country. including the lack of access to capital, small business lending, financial education, and support for startup businesses. with unemployment rates reaching an astonishing 80% in some areas of indian country, and we must do better to address the problems that cause this persistent cycle of unemployment. while it is sometimes easy to become discouraged when considering all the obstacles that face native communities, we will also hear about the great work so many are doing to help address these persistent problems. in south dakota, and in other states, there are many small business owners, community

development institutions, community banks and credit unions, and dedicated public servants working every day to improve the economic climate on tribal lands. just this past august, i had the honor of visiting eagle butte on the cheyenne river indian reservation in south dakota, where i was able to hear directly from small business owners about the challenges they face and the important assistance they received from the four bands community fund. the leaders of these small businesses, ranging from lakota archery the bonnie's quilting boutique, will be demonstrated for me the strength of the native entrepreneurial spirit and how important cdfi programs are too small business growth in indian country. i'm very pleased we are joined

by such a great panel of witnesses here today. and i thank them for being here. i also want to acknowledge and thank senator akaka. we are all fortunate for his service on this committee and as the chairman of the indian affairs committee. i'm proud to serve on the indian affairs committee under his leadership, where we considered many of these important issues. i now turn to ranking member shelby for his statement. >> thank you, mr. chairman. thank you for calling this hearing. economic develop is a challenging endeavor even in prosperous times. into indian country, however, the problem is more persistent and have been made worse by our current economic situation. the statistics revealed severe, the average income of the indian living on a reservation in 1909 was $8000. compared with $14,000, indians

living off reservation. in 21,000 for the average u.s. citizen at that time. to compound the difficulties, the average poverty rate of indians on reservations is 28%. compared to 15% for other americans. despite some well-known successful gaming operations and other business ventures pursued by tribes, the majority of those living i in the indian country e still struggling. the economic develop success some tribal governments have not delivered improved living standards to live on the reservation. unemployment remains high and access to capital for business formation, virtually nonexistent. much of the research and work that our panelists have focus on over the years highlights the inherent difficulty of doing business on reservations. due to the unique relationship between an american indians and the u.s. government, the bureau of indian affairs is the trustee

of native lands. such an arrangement requires that the bureau approves each department effort to try that seeks to undertake. businesses seeking to locate on a reservation must now get murky regulatory waters indian with both the problem government and the bureau of indian affairs. additionally each reservation is governed by a unique set of laws and courts. the patchwork of legal rules and regulations have discouraged business activity on reservations. especially by financial institutions. the problem is only made worse by what some have described as the casual approach to the rule of law. banks planning on some reservations find that they have no recourse when someone defaults on the loan because of their tribal courts are unwilling to enforce the contract. these legal and regulatory obstacles have long hampered economic develop and. i hope we learn, what we learned

today, what steps can be taken to alleviate these problems which have impeded economic development in the country, for far too long. thank you, mr. chairman. >> thank you. thank you, senator shelby. are there any other members who wish to make a brief opening statement? >> mr. chairman, if i might. >> thank you, mr. chairman. thank ranking member shall be for calling this thing together. i want to welcome the whole panel, the two people from montana, marc olsen sue woodrow, thank you very much were being here today for your testimony. i also want to thank you, mark tilsen, i believe you're probably responsible, and i don't know if adam he was the one who got you to come or not but i haven't heard your testimony. but you can come back anytime. [laughter] i want to thank you all. lightning in his body economic development and job creation are my top priority. and they are important in every american community in indian american, in indian country is no exception.

like many places in indian country has its haves and have-nots but a handful of tribes located in more private areas have been private areas have become wealthy with casinos. on deposits i did just federal incentives to do exactly congress intended. it has allowed them to make it gaps in services left by inadequate federal budget. on a negative side, too many people think gaming tribes are the norm in indian country and they are not. the rate of unemployment and poverty in the passenger indian country are dramatically higher than the rest of the nation. some communities many in montana, we see unemployment rates as high as 70%. and the lack of private investment is absolutely crippling to get those numbers down. unfortunately, the tough economic conditions in this country come indian country has been living through it. challenges live -- rural isolation, lack of institutions investment, poor health care, inadequate educational

institutions. in some cases flat cheated out of the opportunities which have resulted in some experts have described as a cycle of poverty. rather than each new generation building on the past, vicious cycle repeats itself over and over again. prevents american indians from achieving their full potential. in this cruel aspect, this cruel cycle affects almost every aspect of american indian life. so tribal members have told me they don't have much to lose so there's not much hope you're hopelessness affects kids and adults. where there are challenges, there are opportunities. indian country is full of opportunities. they hold great potential for traditional and renewable energy. they have potential for agriculture, tourism, government contracting, small businesses. in many cases they need off reservation, private investment

to capitalize on those opportunities and it's not there. so we need to figure out ways we can make that happen. tribes need to adopt uniform commercial code, and reliable lean filing systems that will get outside investors the confidence they need. they need also consistency in government. if they are going to be able to succeed in the world today and create jobs and remove the dash memo that unemployed again. i look forward to hearing from the witnesses today and talking to them about potential solutions to making inroads to investment into indian country. thank you all for being here. >> senator? >> thank you, mr. chairman. the tribes in the northwest certainly oregon has long been tied to temper, fishing and his and other natural resource areas. but only a few tribes still have

timberland base, and for them they're working on diversification for other groups who do not have that base, they're looking at any form of tribal business that can provide jobs and economic development in the 20. one bright spot for our state has been the native american business and on for new networks, cratchit of the program have established a number of small businesses. in partnership with a fair number of banking partners from keybank, yes national bank. but we don't have enough bright spots in the economy of our native american communities, and i look forward to learning about the experiences that you're bringing here today. thank you so much for coming to d.c. to address the committee as we wrestle with this. >> thank you all. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other

materials you would like to submit. now, i would like to briefly introduce witnesses that are here with us today. i'm proud that we have to witnesses from my home state of south dakota here today. our first witness is mr. mark tilsen, the cofounder and president of native american natural foods located in kyle, south dakota on the plane ridge indian reservation. found in 2006, native american natural foods makes a popular talk of our, a protein bar, native also me and cranberries. we also make of the buffalo food products, mark, thanks are being here today. i must say i've enjoyed a few tonka bars over over the years. spent i'm pleased i good friend senator tester suggested mr. martin olson as a witness. mr. olson is the president of eagle bank located on the

reservation in montana. eagle bank was chartered by confederated -- and it's one only of a handful of native a or controlled banks in the country. i'm delighted missed tanya fiddler, executive director of the four bands community bank, fund, in south dakota is here with us today. four bands was created in 2000 has become the leading organization on the reservation in the areas of small business training and lending and financial education. tonia, thank you for helping and your insights.

mr. trent 11 -- is that right? close enough. is executive director of the native american officers association, the association works to improve the quality of financial and business management of tribal governments and business entities and supports the involvement of native americans financial professions. and ms. sue woodrow, community development advisor at the helena, montana, branch of the federal reserve bank. ms. woodrow has worked at the fed since 1990 where she has focused in community development, was the focus of indian country legal issues. we welcome all of you here today, and thank you all for your time, especially those of you who have traveled a great

distance. mr. tilsen, you may proceed. >> thank you mr. chairman, senator shelby, and members of the committee. i'm impressed by your understanding of the challenges we face already just from your opening statements. native american natural foods is located in kyle in the middle of the pine ridge indian reservation. we are sort of a new approach to economic development, and i want to say that we grew out of the cdfi movement. kyl is the location of the lakota fund which was the first reservation-based cdfi formed in 1985 when it was created in kyle, there were two native american businesses. and now there are literally hundreds of native american businesses. we have a reservation-based chamber of commerce with several hundreds of members of all grown out of the cdfi movement.

the cdfi movement provides the essential first wrong for first generation entrepreneurs, both in terms of financial literacy and most of the long -- it's the only commercial in of any kind you and your support of the american indian cdfi programs are essential and their growth is essential for the future of economic development. we are also excited here on pine ridge that we have a nuke tribal transportation program that this committee supported and its new and growing and it is helping. is becoming another essential part of the infrastructure to have a public transportation system on a reservation that is extremely large. your ongoing support is really critical for the and i would like to thank you for your support of our tribal transportation program. i'm going to refer to ms. fiddler on the particulars of the cdfi and talk a little bit about what we are trying to

do with native american natural foods. my cofounder and myself, carlene hunter, who has been businesswoman of the year, she's at another conference, have been involved in both community development and economic development projects on pine ridge reservation since the early '70s and '80s. we are involved in creative the first radio station on the reservation, helping build the first tribal college. the reason i tell you that is i want you to know we are experienced entrepreneurs who have worked very, very hard to build economic the belmont in the community. what we've learned with native american natural foods, the product you have on your desk that is called the talk of are based on the traditional food. that product is an example of indian entrepreneurship it was created by some grandma by some several thousand is going to said you could preserve meat naturally. that product is now the number one selling dried meat snack in the natural food category in

america. all across the country, it's in thousands of stores, and it is so built-in is sold in both health food stores, any reservations, and it is sold through the internet. what's significant here is what one the most economically and geographically isolated places in the countries and we have built a national brand. and that this year we will gross close to $2 million. the challenges that face force as we tried to we built this whole brand but we are not able to create any equity as to keep up with growth. without a challenge trying to match, we are unable to qualify for us p5 a long but we did api a loan to start the company into living expenditure growth because we can meet the 20% equity requirement and there's no provision to allow that to be raise. we use a lot of working on an isolated reservation, we use a lot of federal programs. one of our investors is the

empowerment zone which manages easy funds and a reservation, tribal charter. so what happens there is air force imposition as a nonprofit to guarantee the loan to qualify for sba. so again the dots don't connect. you can't use the sba program. so we tried to bring in outside equity from the social investment community, we are told you can't use tribal investment or social investors because they are not making a pure financial decision, even though they're the only ones with the courage and dedication and commitment to invest in these poor communities to create opportunity for the youth. so there's a lot of dots that don't connect. no, even though there our resources in the system as you all know, there's something close to $30 billion in a jobs act for small business, but every small business will tell you that there isn't any thinking going on. the gods are not connecting in that, and in that aspect. on the cdfi side, there's no

guarantee for people invest into the cdfi, there's many people want to invest in there, but we need to create an opportunity to increase that investment. the cdfis are really essentially important on that first ring, but we need them to of my resources and more power to help us as we try to grow these companies to be exponentially successful, to be large enough to the real impact on the unemployment and economic needs of the committee. and i'm sorry for running over my time. >> thank you, mr. tilsen. mr. olsson, you may proceed. >> chairman johnson, ranking member shelby, and members of the committee, thank you for inviting me to participate in this important hearing on economic to government in indian country. my name is martin olsen, i'm president of eagle bank. the confederate tribes recognize a need to support credit availability for their membership. over 40 years ago the tribal

credit program was created with a modest investment to assist tribal members with a small bounce, short-term credit needs, not adequately addressed by banks. and over the years net revenues were retained to grow the fund. this program has grown into a $45 million fund, providing short-term unsecured, education, homeownership, and commercial loans, and as reserves have grown, the program has been able to return dividend to the tribes. tribes also have a smaller fund for small daughter loans and the grant program patterned after the montana department of commerce indian equity fund. the tribes are dedicated to providing credit opportunities in grants to tribal members and their small and startup businesses that may not have other access to capital. after nearly two decades of research and discussion, the tribes organize the corporation

and charter deal bank data charter eagle bank in 2006. the bank was charged with providing traditional financial services for residents and businesses within the flathead reservation, and to provide services for the underserved, such as small dollar loan and deposit accounts, and check-cashing that many banks no longer provide. eagle bank also works with tribal and other funding programs to leverage credit for small business, and serves as an advisor and grant reviewer for the montana department of commerce indian equity funds, tribes grants program, and the tribes economic development committee. eagle bank has worked with programs offered by the fdic during the crises. temporary, unlimited fdic coverage on non-interest-bearing accounts has provided significant relief in maintaining deposit accounts for

the tribes. and i hope this temporary coverage will be made permanent, not only for eagle bank's somewhat unique requirements, and also for smaller community banks ability to compete with too big to fail institutions. i also hope the fdic would consider unlimited coverage on interest-bearing balances on a fee basis for those willing to participate. lacking improved fdic coverage, or the return of excess deposit upon coverage, the majority of privately owned banks are earning assets may be required to be invested in securities, restricting funds available for lending. access to capital on reservations has been an ongoing problem, with three primary challenges limiting net access. uncertainty created by tribal governments -- governments willingness to support capital, access to capital, uncertainty created by lack of consistency

in securities transactions, and financial literacy. a major impediment to access to capital is the uncertainty in lending within the jurisdiction of a sovereign entity. some tribes are very proactive in developing statutes that support lending, and have consistent enforcement's through their tribal courts. other tribes continue to maintain a more protective environment for their membership. .. >> as they exercise their

inherent sovereignty. financial literacy is very important on reservations with no established bank relationships and low credit scores, many people fall prey to predatory lenders and check cashers n. conclusion, i believe there are opportunitieses for economic development in indian country, but significant challenges remain. the confederated tribes eye approach including chartering eagle bank, is making a difference on the flathead reservation, but chartering or purchasing a bank may not be appropriate for many tribes. thank you, i look forward to your questions. >> thank you, mr. olsson. ms. fiddler, you may proceed. >> good morning to chairman johnson, ranking member shelby and the other members of the senate. um, as senator johnson said, i'm the executive director of four bounds community fund, a nationally-recognized cdfi that serves the cheyenne river

reservation, i also wanted to note that i'm the chair of the south dakota indian business alliance. let me begin by saying thank you for the opportunity to appear before you on behalf of the people and organizations that are working to create native private sector economies throughout the state of south dakota and on reservations nationwide. i've prepared a written testimony to address the opportunities and challenges for economic development from the perspective of the native cdfis. this was quite an upside taking because of the complex -- undertaking because of the complex landscapes we work in. as important to development services is for a cdfi, we also have to factor in the economic conditions and infrastructure limitations that exist on our reservations and throughout many rural communities. our purpose is to strategically and entrepreneurially respond to those factors, meeting people where they are at and providing a path for them to reach for their dreams. in the time allotted, i wanted to at least say three things of all my testimony that i think are important for the committee to understand.

the first, the mission of fore bounds is to create economic opportunity to help people build strong businesses and increase their capability to create assets and wealth. we take an asset-building approach to entrepreneurship development in an area of high poverty and remote levels of access. it's one of the poor e counties in the nation, 62% of the residents live below the poverty level. people travel on poorly maintained roads to access basic goods and services. we've provided over $3 billion in small business loans to help create and expand over 100 businesses on the reservation. over 300 people have completed our business training classes and hundreds have attended workshops. because of the lack of equity and ownership on the reservation, we also have a program that has invested more than $300,000 in our adults and

youth who have invested this themselves by completing savings and completed trainings to achieve assets like home ownership and higher education. forebounds has created a private sector economy, we also incubate the chamber of commerce and conduct a lot of market analyses planning to help our businesses and loan fund identify the correct sector, products and services that are needed locally and that can be provided by a local entrepreneur. we can't afford to speculate on the potential market opportunities since people's livelihoods are at stake. this is the community development side of cdfi that builds community capacity and human capital. the financial and institution side leads me to my next point, and i want to say -- [speaking in native tongue] to is cfdi fund, that means great thanks. if it with respect for us, none of -- weren't for us, none of could have the success we have. many of us believe

entrepreneurship helps build communities. 86% of reservation lands don't have financial institutions within their borders. we have three banks serving our community, but none of them report the credit history on their clients. that makes it each more challenging for a business to start up and secure capital. as a native cdfi we invest in what appears to be on paper high-risk, low-profit target market, but today we've only writtenning off 2.8% to the poorest of the poor in the country which, i think, is a very wonderful for us. we think that the strengths and assets in our people have developed interim systems and external relationships and have helped us support the creation of 400 jobs. i think this is important. if banks but we can, we are even

more vital to a diversified economic development strategy in reservation commitments. our tribe agrees and supports our work for reservation-wide financial literacy and entrepreneurship development in our homes, scales and -- schools and business community. the tribe is the major economic developer, and our work feeds their efforts for work force and private sector development. finally, i think it's important to know that we're seeing results. i'm going to run out of time, but i'll tell you briefly, the economic momentum on our reservations in south dakota that have native cdfis is two to three times that of the state of south dakota in this time of recession. we're playing catch up, though, our median household incomes are still less than the nation's average, but we've had an increase over other communities. i'll end there. >> thank you, ms. fiddler. mr. dead kerr owe -- decemberer the you -- desiderio, you may proceed. >> thank you, members of the committee, for hosting this

hearing. i know how important indian issues are to this committee, and we appreciate you addressing the economic challenges and opportunities in india country. my name's dante desiderio, and i'm executive director of nafoa, and we've had the privilege of helping tribal communities grow their local economies for the past 30 years, 29 years. and we do that by bridging the gap between the banking community and the investment community and indian tribes. we also do that by building capacity, and we do it by working directly with tribes to develop effective economic policy. and i want to use my time today to address three specific low-cost or no-cost policy recommendations. the first two are designed to get rid of uncertainty and bring capital into indian country, and the last recommendation is designed to look at some of these barriers and challenges that are getting in the way of

tribal governments being able to grow and develop economically. over the past three decades that we have been helping tribes, we've seen industries grow and mature, we've seen tribal communities prosper, and we've seen native americans having the opportunity to move home to find jobs and, more importantly, move home to professional careers on the reservation. but we still have a long way to go, and we all know the statistics. the american indians have the highest unemployment rate, we're still at the lowest end of just about every social and economic indicator including having the highest suicide rate, and that's a true sign of lack of opportunity. um, and as a nation we all struggle with the sustained economic downturn and the effects of a stalled economy. and we're now living in the age of austerity with congress having the challenge of trying to cut another $1.5 trillion from the federal debt.

this all makes finding solutions even more challenging and urgent. so three immediate solutions come to mind. the first solution is for congress to remove the uncertainty created by imposing an essential government function test when tribal governments want to raise capital through the tax exempt debt market. every other government uses this tool effectively, but with when congress authorized tribal governments to use tax-exempt debt to raise capital, they put an essential government function test, and they did not adequately define the term. because the language is unclear and because the regulatory agency interpreted congress' intent too strictly, the capital markets now steer clear of tribal debt. equating uncertainty with higher risk and higher costs. the second fix, or the second solution is providing clarification on how tribes are included in governments when it comes to qualifying as

accredited investors. it's important that indian tribes specifically are listed as governments in the securities and exchange commission definition of government body used in regulation d. the current definition is extremely broad, and because tribes are not specifically referenced in the definitions, we, um, see the financial markets are hesitant to extend us the benefit of the doubt, and the regulatory agency is not willing to interpret tribes as fully included. fixing this oversight is simple and will help tribes raise capital in the same manner as every other government. without added administrative costs and legal burdens. this helps tribes to help themselves. and finally, i want to discuss implementing the existing indian tribal regulatory reform and business development act. this act provides that the secretary of commerce convene an authority to perform a comprehensive review of the laws including regulations that stand in the way of investment and

development on indian lands. the authority terminates when the report of recommendations is submitted to congress, meaning there's no added bureaucracy. this type of report could significantly impact development on tribal lands, it could address things like probate, leasing, appraisals and some of the structural impediments that senator shelby mentioned in his opening statements. we all recognize these are difficult and challenging times, but we also recognize this isn't the time to throw up our hands and do nothing. it's frustrating enough for native people and all americans to deal with the impact of an economic downturn, but as we've seen in the past, it's even more frustrating to see the rest of america recover without indian tribes. we need to support programs and clarify language and laws and regulations that don't. it's clear when tribes succeed economically, so do local and

state governments. and we're grateful for the committee for dedicating the time and attention to this matter, and we would be happy to help as the committee moves forward to implement any of these relations. recommendations. >> thank you, mr. desiderio. ms. woodrow, you may proceed. >> chairman johnson, ranking member shelby and members of the committee, thank you for this opportunity this morning. my remarks will focus on the efforts of the federal reserve bank of minneapolis to promote tribal legal infrastructure development that will support private sector business growth in native communities. i want to emphasize that these remarks reflect my views and not necessarily those of others in the federal reserve system. let me explain why the federal reserve is involved in this work. the mission of the community development or community affairs program is to support the federal reserve system's economic growth objectives by promoting fair, impartial access to credit and financial services including in low and moderate

income communities. the minneapolis federal reserve bank's districts includes more than 40 indian reservations. accordingly, for the past two decades we have sought to assist native communities to overcome the significant bare barriers they face accessing credit and financial services. as mr. olsson noted in his testimony, one significant barrier is the lack of or inadequate tribal laws governing secured lending. by secured lending, i mean extenses of credit collateralized by a borrower's personal property which includes anything that is not land or fixed to land. these types of transactions in all state jurisdictions are governed by article ix of the uniform commercial code. state law generally does not apply within tribal jurisdictions, however, and we have found that across indian country with a handful of exceptions secure transactions law is largely incomplete, outdated or nonexistent. the result is that lenders face

very uncertain rules and, thus, higher risk -- actual or perceived -- doing business in native communities. consequently, loans and other business deals are frequently made at higher costs or not made at all. to address this, the federal reserve bank of minneapolis has provided substantial assistance to tribes across the country that choose to adopt the uniform law commission's model tribal secure transactions act, a comprehensive template law substantially similar to state law but specifically tailored for tribal environments. we have also helped facilitate several state tribal compacts that enable tribes that have adopted the model act to utilize these states' ucc filing systems for the filing of liens under tribal law. these arrangements complete the tribe's secured transaction systems in a manner that offers certainty and reliability for lenders and for borrowers while at the same time preserving

tribal sovereignty and tribal jurisdiction. we are also involved in working with the uniform law commission to launch an initiative to draft a model tribal probate code to help ameliorate the significant problem of fractionated interest in indian-owned lands. this has the potential to free up untold lands for collateral or develop while, again, maintaining tribal sovereignty and jurisdiction. to move forward, however, this initiative needs funding to insure it has broad participation from tribes and native legal organizations. the minneapolis federal reserve also works closely with many indian country partners and others to provide native entrepreneurs a voice through broad cross-sector coalitions including the montana, south dakota, minnesota and sioux north dakota indian business alliances. these alliances collectively

have significantly helped elevate the dialogue about the importance of supporting native entrepreneurship and private sector development in indian country k regionally and nationally. because these initiatives are still recent or pending and because good data on tribal business environments and outcomes are lacking, we cannot thoroughly access their efficacy at this time. however, we are monitoring progress and in time will provide feedback on which approaches are associated with improved economic performance and small business development in indian cup. country. in closing, many tribes, native organizations and indian entrepreneurs have been working diligently to meet these challenges, but much remains to be done. with continuing support for native grassroots leadership and appropriate outside assistance, however, i see many more opportunities for tribes and their citizens to further develop the legal and civic institutions that will support small business growth in indian

country. thank you. >> thank you, ms. woodrow. thank you for your testimony. as we begin questions, i will ask the clerk to put five minutes on the clock for each member. ms. fiddler, your written testimony points to the impressive economic data shown in an increased number of individuals in medium income on the reservations in south dakota over the past decade. how does forebands plan to sustain this growth and leverage it for more private capital investment? >> um, well, as the capacity of the community has been coming up and people have been getting introduced into banking, savings and changing their financial behaviors, um, folks are starting to like with the ida

program invest in themselves, but also their first introduction to microloans start to get the equipment that could be collateralized on larger and larger loans. the other trick to this, it's kind of a different way of thinking about it, but this financial literacy and entrepreneurship development work we've integrated into our k-12 school system, and we're replicating it on the pine ridge and crow creek reservation. when we think of sustainability, we're talking about a deep investment to raise the skill level of every kid on our reservation, and we impact 2,000 children a year with financial literacy and entrepreneurship in their core subject areas so it doesn't push up against no child left behind or the other requirements in education. we make sure that our curriculum meets the education standards. so we're kind of hoping we work ourselves out of a job there eventually, that the skill levels have come up and that people start to change behaviors. we have these abcs of

financial literacy and entrepreneurship begin to change behaviors and realize that they contribute to the economy, the buying local, the research that we've uncovered with the business-to-business market, our institutional marketplace with tribal governments and the school systems where are they spending the money trying to get people to bring the money back home. as the tax revenue increases for the tribe, all of a sudden the economy gets more and more functional, and our role would be able to back out people who have credit histories because we also warehouse through a nonprofit collaboration with the credit builders' alliance here in d.c. to report credit histories, um, on our clients. so now they're actually getting, um, doing some credit as an asset, building a credit identity that's going to help them access, um, affordable products. so there's a thurm of different way -- number of different ways that we look at this, but i think most strategically identifying the opportunities for entrepreneurs to fill local gaps. next steps out are connecting them regionally and hoping that

the state of south dakota sees our reservations as, um, contributors to economic development strategies, not just these isolated places, but that there's more engagement. and on the part of rural as well, sustainability for us on cheyenne river means that the national dialogue on job creation includes rural places as much as the urban centers where most of our jobs occur. but we have to look at the assets and see what we're contributing. there's infrastructure development with energy highways and things like that that are going to impact us locally because we do have those assets, wind assets and those kinds of things. >> mr. tilsen, you've recently encountered difficulty finding a lender willing to loan native american natural foods money. increase the company's capacity due to increased capital demand. how critical was the loan you received from a ctfi to a

business being able to meet increased consumer demand? >> [inaudible] our local cdfi, we never would have been able to launch the company, and it wasn't for the clearinghouse out of los angeles in cooperation with the sioux tribe and the american indian land stewardship foundation, we would have probably had to have close down last may because we didn't have any way to access the money because of the problem of not being able to use a federal guarantee on the sbi side or the bia side, so the dots didn't connect. so we created a complicated transaction in which the tribe made a donor-designated grant to the american indian land tenure stewardship foundation which is one of our equity investors. they pledged that $250,000 to the cdfi clearinghouse in los angeles, and that put, that gave

us a million dollars worth of lending. but you've got to understand this is a very complicated transaction that we had to do in order to save the company, and that's what i'm talking about in terms of a lot of these programs do not, um, do not connect. like, i'll give you another example. um, a lot of our reservation-based businesses we are used to work with the american indian employment tax credit. but because we have marginally-profited businesses, that tax credit, we can't fully use it. and it's not transferable to our minority investors who are often much more successful and profitable than us. so just by making that credit transferable to the minority investor, you would create an opportunity to increase investment in equity into small business. and there's a series of things like that where we see opportunity where we just don't, we spend a lot of our creative

energy trying to get these dots to connect to grow these businesses. and our situation is not unique. i can tell you about a hotel on the reservation, a current entrepreneur's trying to own a movie theater. everybody's having the exact same problem as the first generation entrepreneurs are reinvesting back into the community trying to make it grow into this second-level tier, and it's -- the equity is our big challenge. >> mr. olsson, your written testimony makes it clear that chartering a bank may not make sense for every tribe. can you expound upon what other tribes might learn from their experiences on the flathead reservation in determining whether or not it makes sense to charter a bank, and is it a credit union easier to charter?

>> senator, in the case of the confederateed tribes, the reservation was open to homesteading in 1910, and a significant part of the developed real estate is owned by non-native americans. you have less than 25% of the residents on that reservation have claimed native american status as heritage in the 2010 census. this provides a broad basis that a bank can utilize for gathering deposits and make loans. banks, as you well know, are somewhat regulated, and that may be a topic for discussions couln the road. but in those cases you have severe limitations on what you can do in banking in transactions with affiliates. if you are on a reservation that is not as diverse as a

confederated tribe, you may not have a sustainable base to support a bank and be able to have adequate lending to generate revenues. i commented in my written testimony that perhaps a credit union may be a more viable opportunity in some of these instances because you're dealing with individuals, small loans, those kinds of things, but you're not in a spot that you need to provide a profit for the bank and the shareholder and your regulatory requirements for assisting members in a credit union. there appear to be somewhat less stringent than banks. >> senator shelby. >> thank you, mr. chairman. i'll help move this on. i have nine questions, i think they're related to a lot of this testimony, and i'd like to submit these questions for the record. >> without objection.

>> thank you. >> senator tester. >> thank you, mr. chairman, and i want to once again thank all the witnesses for their testimony. i'm going to start with martin olsson. in your testimony you address the technical assistance for entrepreneurs in tribal communities. you point out some room for improvement, to say the least. one of the deficiencies that you point out is some of the folks responsible for technical assistance may not have any business experience themselves which i find unfortunate. and that may be an understatement too. can you give me an idea who these folks work for? do they work for government agencies, are they private technical assistance folks, or -- >> we have in the our area at least we do have some contract providers of technical assistance, and we also have some tribal employees who are

providing technical assistance under some of the tribal business entities. um, please, don't misunderstand me that theme that i know -- the people that i know and work with are highly dedicated, they work hard, they're really trying to do what they're charged to do. but, unfortunately, at least on the area i'm familiar with you have a lot of small businesses that, um, what you really need to do is mentor them and understanding how to manage a checkbook to keep track of records for a small business. you don't need to be developing a business plan or a chart of accounts or a quickbooks accounting system because the individuals have not grown in their financial literacy to that level. um, i tend to be a little crossways sometimes with our ta providers because i have told them repeatedly if they're

bringing in grant application that i'm charged with reviewing or a loan application, if the information provided is not a business plan that the potential recipient has participated in preparing and understands and is able to use that to mark guideposts for his business, then it's absolutely worthless. >> right. >> so mentoring may be a better way to go if we can put something like that together. i'm not sure how something like that could be organized or funded. >> well, you answered my second question already, and that was if you had any ideas on how we could put a greater focus on mentorship and maybe some other folks on the panel have the same experience that martin olsson has. mark tilsen? >> i wanted to add on the other side of the situation, um, we're a company that's investigating looking at a the new market tax

credit, but in terms of technical assistance, that means we need expertise in integrated supply chain, just-in-time supply chain management in order to make that next goal. and within the current structure there aren't any resources to find, to pay for those consultants. so if, if cdfi funds could have money to contract experts in to help with exponential growth, i think it would allow us to better utilize tools like the new market tax credit. >> okay. did you have a comment? >> real quick. four bands are modeled a little bit different. we have a business coaching model. you -- we connect people with mentors, you know, on a case-by-case business. bigger businesses, when we have bigger loans, we're able to do that. so we would be happy to, um, advise or, you know, have people in. we actually have anywhere from five to six, um, native nations

that come visit us on cheyenne river a year to learn how we do things because my coaches as loan originators, but all of the business planning is driven by the client. we don't do for anybody because it's important for them to have the skills. and then coming occupant the other -- out the other side of it we offer workshops that are specific, and we're trying to get better at doing our job with folks. >> yeah. i think the point i found somewhat distressing is the fact that if we're going to have folks be successful in the end which is what we're about -- creating jobs and successful business interests -- those technical assistance folks no matter how well being they might be and how well they work, they have to have the business experience that can relate with the level of business they're working with, whether it's start-ups or whether it's expansions like you're talking about. so if there's ways we can help in that, that would be good. i want to talk about trust property real quick because my time is running out. um, trust property is something that's pretty unique to indian reservations, and it's something i know, martin, you've worked

with, i know, sue, you're an expert on it. but there are many financial institutions that, quite honestly, don't have a clue about what it's about. and we've had experience through you, martin, with one of them, and we got to the bottom of it, but it takes a while. the question is, and it's for both martin and sue, and you can go first, sue. is there a role for regulators like the fdic in helping financial institutions understand the issues unique to tribal communities as it relates to trust lands? >> thank you for the question, senator, and certainly there's always room on the education front to help financial institutions understand these things. um, the one thing that i would like to point out, and i'm going to circle back to the uniform law commission's proposed model tribal probate code initiative is, you know, but need to begin -- we need to begin tackling these issues, but we have vast areas of land in

indian country that are tied up and unable to be used either at collateral to access credit or for development purposes. >> that's right. >> this particular initiative will begin to tackle just one small piece, and that is to, moving forward, really tackle the fractionated interests in allotted lands. this initiative, of course, needs some funding to be able to move forward, but the intent and certainly has included a broad representation not only of federal agencies that are involved in this, but also key stakeholders from tribes, native, um, legal organizations and others to come together and really work on tackling this issue. so i, i, um, would really look for support for this nicheny to -- initiative to get off the ground. i think it's a critical one. >> okay. martin, from your perspective as a banker, can regulators have an impact on knowledge about trust lands? >> there is a need for education

both on behalf of banks who do not participate in trust financing as well as a lot of tribal governments where trust property financing is not currently being utilized. the role and scope of that education is something that, i think, needs to be addressed. i'm not sure who is the best to take that lead, but you know me, senator tester, i'm always reluctant to suggest a regulatory agency provide additional guidance. [laughter] >> gotcha. point well taken. thanks, and i ate one of the bars, and they're great. keep business going. [laughter] >> senator akaka. >> thank you. thank you very much, mr. chairman, for your, for your leadership in the holding this important hearing. chairman johnson, senator tester and i also serve together on

indian affairs where we have been examining economic development and job creation opportunities and challenges in native communities. sustainable economic development provides a key to self-determination for indian tribes. even though some native communities have seen improvements in economic development opportunities, most tribal economies continue to suffer high unemployment. it is important for us to look at where tribes have been successful and support those efforts because when tribes succeed economically, it doesn't just benefit their members, it also contributes to creating

jobs and boosting economies of local communities and states as well. so when we invest in indian country, we are making investments that impact all of us. investments that will help us navigate the road to american economic recovery. it is also important to talk about the limitations of restrictions this federal law -- in federal law or policy that hinder economic prosperity and self-sufficiency in the indian country. and to examine what we in congress need to do to remove those barriers. i look forward to address the economic development needs in indian country and surrounding communities. i'd like to ask ms. sue woodrow,

um, the federal reserve bank of minneapolis has been proactive in identifying the needs in indian country to encourage economic development in native communities. mr. olsson has testified that one of the big problems with access to capital for independent businesses is lack of financial literacy. in your view how can we can't to improve -- continue to improve our efforts to empower native commitments to make informed financial decisions? >> thank you for your question, senator. i think, um, and i would agree absolutely with ms. fiddler that the need to support financial education efforts is just imperative in indian country. and i know that there are a few

ways that this can be done. first is, um, really through helping and supporting the development of culturally and economically-relevant curricula for schools in particular, for students. continued support for community development financial institutions, i believe, is imperative. currently, it's one of the primary providers of financial education in native communities. um, support of small sector, small business sector growth in the native communities is also important where we have areas of high unemployment, um, small business growth will provide jobs, provide opportunities for people to actually work and have an income and, therefore, have something to financially manage. it's very difficult to learn financial management when you have no money to manage. and last of all, i think that, um, and this is really from the tribal government side is really to encourage tribal government policy that mandates or requires

financial education in the schools. >> thank you very much. dr. desiderio, your association testified a at a recent hearing, indian affairs committee on the impacts the karcheri decision has had on economic development in indian country. of can you describe those impacts for this committee? >> sure. senator akaka, the -- first, i want to make a comment based on what ms. woodrow talked about in building capacity, and i think we do focus a lot of efforts on building the capacity on the tribal side, and our

organization certainly does that. but there's also building to capacity on the other side of this which is the banking community, investment community. and i think that's part of our job at nafoa, is to bring those two together. and i think when we do that, we bring more competition, and we bring better rates, more affordable capital. and one of those, you know, it's difficult enough to do financial transaction on it own, and like we've heard today, it's more difficult in indian country. you do have trust land issues to deal with, you also have sovereignty issues to deal with, and that gets to your question of this added, um, uncertainty that the capital markets need to deal with when they want to do business with indian country. and as it was in my testimony today, we have that uncertainty when we deal with trying to raise money for tax-exempt bonds, using the bond market for that. our administrative kohs are higher -- costs are higher, and our capital costs are usually higher because of that

uncertainty. we also have uncertainty when we want to invest and partner with other tribes, and we pay more each year for those administrative costs. and the karcheri decision v. salazar, basically, adds another layer of uncertainty, another layer of legal costs to our financial transactions. and i think, you know, besides turning 75 years of federal policy on its head, there is now this idea that you need to have this karcheri test for financial firms to do business in indian country, and the problem with that is that nobody's really come out with, um, you know, a firm idea of what, what the, what the decision -- what tribes are going to be impacted on the decision. so it absolutely adds an additional layer of uncertainty and cost for tribes to transact

business. >> well, thank you very much as you relate that to the karcheri decision. uncertainty has really maked the indian communities and thank you very much for your responses. mr. chairman, my time has expired, but i have other questions here that i'd like to ask. >> i'll go to a second round. >> all right. >> mr. desiderio, what barriers do you see that limit access to capital in indian country, and what role does your organization and your individual members play in helping to eliminate these barriers? >> well, i think as some of the panelists have suggested, um, it is difficult to set up

businesses and access capital on reservations, and you have another layer of issues to deal with. some of the, you know, when there was a study that was conducted and funded by the casey foundation a few years ago which set out to examine banking on indian country. and it's obvious that indian country is some of the most unbanked or underbanked parts of the country. and i think until we get, um, our native consumers and businesses and tribal enterprises in a position where they have competition, where they have, um, different choices for short-term loans, home loans, business loans and enterprise loans, um, that tribes are going to be in a position of paying more for capital or struggling to make these businesses and enterprises work. our organization plays a role in

trying to bridge that gap and trying to, um, educate the banking community into coming into indian country. and i think one of the tools that we have is the community reinvestment act which, um, tribes are eligible but, um, for some reason the indian community is not considered, um, a lot of times when banks are making the decisions to invest outside of the specific communities where they bank. so this is a, um, you know, which comes first situation. we need banks in indian country, we need community be reinvestment funds in indian country, and we need to continue to educate both on building the capacity side for the investment and banking community and the tribal community. um, and, um, you know, we're also on the building capacity side one of our missions which we take a lot of pride in is to build the next generation of financial and economic leaders. and we do have programs where we

do send, you know, we do give scholarships, and we do send our kids to lead the program which builds business skills and leadership skills. and we also have -- are working with wall street to give native kids that opportunity to go and learn how things work in different investment commitments. so it all helps to build that capacity. >> ms. fiddler, do you see the cdfis competing with the banking industry and with the credit union industry or come policemenning those -- complementing those entities? >> on both cheyenne river and pine ridge reservations, we have a credit union, community first credit union on cheyenne river and, um, dakota funds is sponsoring to start a credit union on pine ridge, and we're

looking forward to it for the opportunity to complement each other's work. one thing we don't do as a re involving loan -- revolving loan fund is take deposits, you know, the credit union model and can getting them up and running. we'll have helpers when it comes to this financial education that, you know, we're trying to provide reservation-wide and carry that. the credit unions that are working in our communities are taking some of that on. they have a different dialogue when they work with the consumer, and we need places where, um, folks can be depositors and, you know, like i said earlier, hopefully, their cret worthiness reported out. we gave testimony last year on behalf of the native communities on the cra relook that they were doing, and i'd like to, um, send that to the committee after the fact here because there were a lot of recommendations. it's not about regulation and creating more complex systems, but including some innovations that help people get credit, the

banks in my community get credit for their work in distressed communities, you know, more tagging like that, you you know, possible investment that could take place that they would get credit for because my local banks don't know that they can do that. so i don't see us competing, but e see us being ahead and compete anything a positive way when we have a better product and service in a profit and hoe-margin area. it gets all of us performing to the needs of the consumer, that that's driving it not necessarily our ideals or a top-down philosophy. you have to realize what your local community can support and is willing to support to have conscious in what we do in these place because there's too many opportunities for payday lenders. we've got them downtown main street, that kind of thing now, and as much as we do on the financial education side, folks are free to make those choices. but if there aren't alternatives for them to develop real banking

relationships, and we do that with our youth. we're walking them in, introducing them to the banks, opening up savings account. coming out of poverty, i wasn't comfortable going into a bank until i was in my mid 30s. i was terrified just because of the unknown. so we try to do that to complement the relationship of the bank in the community with what we're doing with our clients. >> mr. tilsen, what role does a trust land census play in developing resources? >> um, carr dean hundreder and i are also -- hunter and i have a 6,000 square foot paid-off building that sits on tribal trust land that we can't leverage to grow our business business with. we can leverage the building,

but we can't leverage the complete as is set we've invested and paid off over the last ten years. that's just one example. when we're dealing, you know, the muffler industry is growing at a tremendous rate right now, but the average age of the buffalo producers is over 60, and a lot of young people are interested in getting into that, but they can't access capital even if they own their own land. so they don't have the 20% equity requirement to, you know, be able to access that. you know, i think there may be some models to look at like the, like the 874 loan program that has opened up mortgages for houses, that maybe there could be a model similar to that that would allow some kind of leverage to help people get over that barrier. i'm not exactly sure. or looking at creating an equity bank that people could then use, you know, use some of that equity. but i also really want to emphasize here that doing

economic development on the indian reservation where all the power exists outside the reservation and the historical model of subsidizing businesses, their capital and labor to move onto the reservation has never worked at wealth creation. now that we have a pool of growing entrepreneurs in indian country and the age -- and a growing population on indian country, we really have to recognize that the leadership, the creativity and the courage, um, is in the indian community, and we have to figure out how to make sure that the minority investor can take the tax advantage, but the power, direction and authority both because of sovereignty and because those are the people who are creating the wealth have to be the ones that hold the power. but we have to have a way to incentivize these minority investors whether it's in the new market tax credit, whether

it's creating some insurances within the cdfi program, you know, whether it's structurally within the american indian employment tax credit. it's essential to me that the leadership be allowed to meet people like tanya, people like mr. olsson who are right there on the front lines because we're often dictated to by all these federal agencies, and you can't get the lines to dot. there needs to be a little bit from the federal level a little bit more risk taking to allow some flexibility and allow the leadership. i want to use as an example, if you'd just indulge me for a second, the partnership for sustainable commitments which is our reservation is one of those, is a unique opportunity that gets the tribe, state, federal, county programs to all work together to come out with a sustainable plan. and there's been, you know, it's a great project, and people are very excited about it on pine ridge. it's currently the hearings

going on on the house side are going to eliminate, they're going to make it -- the new proposal is that federal agencies will not be able to talk to each other in trying to find solutions to sustainable development and cooperation in that which is the language that's on the on the house side today. that's the opposite direction that we need to go. if we're going to solve economic development, we need to create more flexibility on the ground level, and the leadership has to come from the people who are actually doing it and reverse this model if we're going to go from dependency to independence. and i've seen this time and time again, and i'm a big believer in this both in terms of sovereignty, but in effectiveness use of federal, state, tribal and entrepreneurial dollars. >> mr. olsson, how do you deal, um, with the collateral you

have? in do you go to tribal court or state court? and enforcing rights? >> senator, um, where we have a large population that is not native american within the reservation, it makes a bigger challenge for banks who are dealing in collection areas. obviously, we are prohibited from inquiring to any nationality or if you are a tribal member at the time a loan is originated. unfortunately, at the time you end up looking at a collection issue, what we typically do then is to, number one, verify whether or not the individual is an enrolled member of the tribe before we proceed with a czech action. if they are an enrolled member with the tribe, then we do go ahead and utilize a tribal court system for all collection actions. if we're dealing with a trust

property issue, that is a piece where you know up front that the individual is a native american within the reservation. you have to go through a fairly detailed application process and approval by the bia or their delegated authority before you can perfect a mortgage on trust propertiment -- property. fortunately, we have not had to look at any collection actions on trust property or any real estate at this point, so we feel fairly good about that. but if we do come into a point that we have to look at a collection action on trust property, that will go through the tribal court system. >> senator akaka. >> thank you very much, mr. chairman. mr. olsson, thank you for the work that your bank has done in the community to assist tribal

members whose needs were not being met by the traditional institutions. in addition to the programs that eagle bank runs, you also observed that the programs that are available for the first-time home buyers and students can be effective. so my question to you is how could you expand your coaching services into a more formal program of financial literacy? and what would the benefits be? >> senator, one of the premises when eagle bank was chartered was to develop financial literacy and work closely with the underbanked within our market whether they're tribal members or not. unfortunately, in the current economic environment our resources are extremely limited as is our staff time.

what we would hope to be able to do is either through increased revenues and retained income or perhaps if there may be some type of grant program available, we would like to be able to offer dedicated staff to the financial literacy and training. um, we just are not able to do that at the moment. so if you've got some good ideas on how we can increase staff, why, that would be greatly appreciated. >> well, thank you very much for that. we certainly want to, would tell you to try to work on it. >> thank you. >> ms. fiddler, can you describe for us the four bands youth

entrepreneur internship program and the benefits you have found by bringing students into this program? >> thank you for the question, senate. senator. so back in the day, it was about 2005, 2006, when these match savings programs were coming about, um, our tribe, one of our tribal programs for poverty alleviation wanted to invest in youth individual development accounts. but the problem is that, um, the kids need to earn the money somewhere in order for them to be eligible for match monies. meanwhile, our business community, um, being low profit area can't afford the employees and kinds of things that they need. and the wonderful thing about our native business community is that their always giving back. whether they can or not, they're just a general rouse place. so we -- generous place. so we matched up businesses with these young people that were needing to earn some money for higher education for the most part.

they do 100 hours of internship with a local business. we pay them a stipend. they save half of that stipend, and many of these kids are saving all of their stipend to go on to college. and then there's the teachable moments that includes financial education as part of their internship that they have to do. um, they have to complete an asset training so if it's higher education, we do have some young single mothers that are looking to get into home ownership, to our habitat for humanity office. so they're completing home buyer training. so whatever the asset that they identify in the internship, they save for, we match, and the businesses are getting the benefit. many of the businesses because they're, um, you know, not knowing what the work force or look like, many of our local businesses have actually picked the kids up after. so we've got nearly 100 kids that have completed the program. most of them made their goals, are on to college.

we're studying out to see if they're completing, and it's the majority of the kids are still working on their higher education. our young lady is still working on getting a home for her and her new baby, that kind of thing. so it was aninnovative way to address all the shortcomings that we have with lack of jobs, you know, lack of experience, and our business has not been able to afford to take on the employees that they need. so they jump up and volunteer the help us out in that way, so that n a nutshell, is the youth entrepreneurship. >> thank you very much. >> thank you. >> mr. tilsen, your success in creating food products that promote a native american way of wellness that feeds mind, body and spirit is impressive and inspiring. but the difficulties that you have had in securing support to keep your company alive and growing is sobering.

the number of agencyies you have had to visit is daunting, and if you were to give advice to a native american entrepreneur who's interested in starting a business in indian country, what are the important lessons you could provide based on your experiences? >> focus and flexibility. um, you know, we started out with the model of -- we launched a natural food company in the middle of a food desert, an isolated indian reservation, because we wanted to figure out how we could create a product that would impact our growing rate of diabetes in the community. our original business model thought that we could distribute it nationally and make enough money to subsidize it and make it available at an affordable rate within our school system.

that business model has not succeeded at that goal. we still have this -- while we've gotten a lot of young people involved and a lot of young people love to talk a brand, we face the reality of not making it affordable. so we have to be flexible in that. and we have to try to hunt out agencies. like, there's a lot of talk about food deserts right now and a lot of talk about diabetes, but again, trying to connect those dots and making those resources available to make the product, to get the product into the schools, you know, we're all over the country, but we're not in the high school across the street from my office. except for maybe on a special occasion. so that, that's a real challenge, and i guess that's why it takes a lot of focus and a huge amount of networking. and you have to, you have to stay focused on your mission and your goal. and we go back to our mission every day with every decision,

and, um, and it's the support of the entire network within the cdfi commitment, within the social venture network commitment, within the local community where so many people want you to succeed. .. i want to thank our witnesses very much for your responses. thank you, mr. chairman. >> thank you all for your

testimony and for being here with us today. i'm grateful to all of you for the important work to do to make economic development a reality in the country. as the chairman of this committee, i will continue to work to improve the lives of all american unions, and we need to continue supporting your efforts. this hearing is adjourned.

last month the senate education committee voted to revamp the no child left behind law. the new version would reduce the federal the rental overseeing the nation's public schools. last week the committee heard testimony on the educational from teachers at education advocates. senator tom harkin of iowa chairs this to a and a half hour hearing.

>> today's roundtable will focus on moving beyond nclb, no child left behind, the iteration of the elementary secondary education act and towards teauthorization of the law in lf the 21st century. the last two years this committee has held ten hearings on the full range of issues of covering the law.entury. we also held numerous stickle he meetings and participate in thee lengthy negotiations to bring id with my republican colleagues which resulted in a bill voted out of the committee a littleith over two weeks ago. i believe the committee's bill takes several important stepsi e forward. by one, resetting the national goal from students obtaining im proficiency to ensuring that students graduate from high na school prepared for college andi a courier. secondly, by closing the comparable the people and injuring schools get their fair share of federal resources. 3com incentivizing states and districts to develop rigorous fl

teacher and principal evaluation support systems. with a goal of continuous and structural improvement and fourth, providing a laser light focus on turning around the bottom 5% of schools and the nation's dropout factories for n high schools that a graduate less than 60% of their studentsf so that real change occurs in the schools and the students whg attend them have their academic trajectory onsc a new and improd course. from the keyl hear stakeholders in this debate who are impacted by the educational laws kleypas in washington. i am eager to hear each of their perspectives on how to this reauthorization we can provide states, districts and schools oo the tools they need to help pvie diudents succeed.es, i think we have provided some o all udentss in the bill and i am sure there are others who think shtoolan be done. one thing i know for certain is the current law is not bringing about the improvement in studeng achievement our country needs b and our children deserve. signi

improvement we must needs and our students deserve. we might reauthorize to get out from under the no child left behind reauthorization bill. the goal today is to have an open discussion that information the oncoming debate on the reauthorization. and i thank all of our participants to be here. i turn to senator enzi who has been a ranking member on this committee. >> last month's markup of the act was a major step forward in the reauthorization process. i expect that there will be many more changes to the bill that we reported from the health committee in order to gain

broader support from both sides of the aisle. marking up the bill was the first step in the reauthorization process. not to say that there wasn't a lot of work that occurred behind. contrary, we received testimony from over 70 witnesses including the secretary of education. elementary only case experts, teachers. the committee hosted a website from people all across the united states can express solutions. concerns, fixes in order to improve the no child left behind. we're holding this roundtable to get input on the bill. we want to know to hear what else we need to do to improve the bill as we move foward. i want to thank today's panel t panelists each of whom come from

different backgrounds. today, we'll continue the conversation of identifying problems on the ground with the current legislation. and how we can create policy that provides fleblgt for innovative approaches in the state. although there are many criticisms of no child left behind, there are positives that we can put to as well, it moved the conversation around education in this country, it invited parents to take a more active in their child's education. i think that has been retained to making sure that no child is left out. by making sure that data were broadly available, can have all of the access to information they needed to make decisions

about children not just about schools. that's a profound development and one that i'm committed to retaining and building upon. while no child left behind pushed us to learn about and address the shortcomings in our schools, it put strict rules on how schools addressed deficiencies within schools. we asked states to intervene only in their bottom 5% of those schools and those schools with the largest achievement gap. however, parents and teachers will know how their students are doing because of the information reported for every child. we want the results to follow the child so subsequent teachers can make a difference. accountability that expects students to be college and career-ready to determine what makes the most sense for their

students. i hear the concerns of many that this bill doesn't include performance target and other annual objectives. having the goals of students entering careers in college is a goal that requires intensive, grade by grade planning. not some marker as to whether the student is prepared on the way they graduate. they don't need unnecessary federal micromanagement that says how and when they should reach each progressive milestone. no child left behind didn't handle this very responsibly. the bill we reported out of committee attempts to remove no child left behind oversized federal footprint and returns it to the state where it belongs. as i stated during the markup, i don't support 100% of the bill,

i would supported a smaller federal government role. that's the essence of getting something done, it will include the broader congress, stake holders, moving forward so action can be taken instead of just wasted debate. again, this is another step in that process, we'll be further informed as more voices are involved with that said, i'll continue to support a federal lesser role in schools. we need to place more imfa sis in seeing that each child is getting the education they deserve. i encourage my colleagues to work to getting this bill pass.

thank you very much, senator enzi. let me a moment to introduce our participants. some senators like to weigh in with their introductions. i'll go down, i'll start on my right, first rick hess, mr. hess is the author of the education comme comment, the director of education next, research associate on next is john schnorr president of the board of directors. he has developed education policies on teacher and principal qualities.

after school programs. chartered schools and preschools. and i would now invite senator paul to introduce the next person. >> i'm pleased today to have pam gisselhart, she's gifted and talented teachers and one of the great successes of our kentucky public education. and i really glad that we able to have this hearing to talk about the bill before it's final, to get your input and your understanding and your input as to how we can change and make no child left behind less of a federal burden on teachers and prince pals and all of our educators. i thank you for coming. >> thank you, senator paul. >> next, we have tom luna. mr. luna, he'll serve as president beginning in 2012.

next is katie, senior vice president for government relations with easter seals. she does incredible work with easter seals, i can attest to that over the years. she's responsible for easter seals federal and state public policy activities. co-chair of the consortium. has expertise in both disability education and early childhood education. next, i would ask senator alexander. >> mr. chairman, we welcome charles seaton from memphis. he's after a career or 15 years in nonprofit juvenile prevention program, he decided that he wanted to work with children in memphis and he works in the eighth grade with exceptional children, special education children and i understand that

he's involved as tennessee teacher and principal is right now in the teacher/principal evaluation process. welcome. >> thank you very much, senator alexander. next is -- i would invite senator hagan for the next. >> thank you, mr. chairman. i'm proud to have an opportunity to introduce an old friend of mine, a proud north carolinian, one of this country's foremost education leaders, dr. terry greer. she has -- he has experienced the public education system from all levels. a graduate of east carolina university and vanderbilt and as a teacher, coach and a high school principal. i first met dr. gear in 2000 when he became the superintendent of my hometown.

during his eighth years in the county, dr. greer led the district as it cut its dropout rate in half. to less than 3%. increased the high school graduation rate from 63% to nearly 80%. received one of the largest investments from the center of creative leadership to help schools leaders. today, early college institutes across the country are wildly seen as one of the most effective ways to steer our low-income students on a path of success. >> then dr. greer continued his track record in san diego, he helped reduce the dropout rate by 60%. in 2009, dr. greer became

superintendent of the houston independent school district, the seventh largest school district in the nation with more than 200,000. houston, his initiatives continued to produce results for schools and students. and last month it was announced that the houston independent school district landed 87 schools on the 2011 of the state's high-performing schools, by far the leader in urban school districts in the state. so, i'm pleased and honored to welcome my old friend, dr. terry greer to this committee. thank you. >> thank you very much, senator hagan. next is -- sorry mcmikulski couldn't be here today. she is teaches public education, current

currently teaches at a school for students are medical fragiled. in addition, she also serves as a resident advisor for new special education teachers. and works with students of autism. next to amanda, mr. henderson, the president and ceo of the leadership conference, he also heads up the leadership conference education fund. prior to these roles, mr. henderson was the washington buerau director of the naacp. >> i would like to welcome today, allen thomas, president of madison high school in richmond, kentucky, vice president of the kentucky association of secondary school principals. this year, he was the kentucky principal of the year. and he has spent time working in his school on focus and finish

program. which identifies struggling seniors. we're very happy to have principal thomas here with us today. >> thank you very much. thank you all for being here for this very important discussion. >> mr. hess and mr. shur i'm told you might have to leave early. thank you. before we start, let me explain the format of the roundtable. i'll ask a question of one of panelists. that person will answer. if one of the panelists wants to respond, take your name tent and put it on its head like that. so, i know to call on you. if a committee member wants to ask a question or a follow-up or an intervention, i ask them to

do the same. so, we usually have a lot of fol whox want to talk. i'll recognize someone and we'll continue the conversation. it won't be like a formal hearing, although it's being recorded. we'll try to keep the discussion flowing. hope the result will be a good in depth conversation regarding the bill. i just also ask that everyone to refrain from giving speeches. if they're a couple minutes long, that's okay. but long speeches. so, given that we may lose you early, i'll start with mr. schnur. can you tell us what the strengths on of the bill or how you think it could be improved? >> thank you so much. it's an honor to be with you.

you're tackling one of the most pressing priorities for country and the blend of addressing education as both a national priority and a state and local responsibility is delicate one. i understand there are issues at play on this bill. i have been in dozens and dozens of schools around the country working to improve low-achieving schools, urban schools and rural schools, i think we have some lessons emerged from those. when we looked at the schools, we analyzed, we have schools that are making dramatic progress. kids who many people in the society don't think achieve, we have actual examples. we're getting dramatic progress.

we have leaders from schools -- we have nalszed the difference. one, in all of the schools that have been progress, there are high expectations what the kids can achieve. specific expectations. for success in college and career. secondly, there's a focus on the school on a constant improvement on teacher and feedback to improve the quality of teaching regularly in the cool. because teachers aren't just born. you have some great teachers. teachers who are working at it can make dramatic improvement when there's the proper feedback. third, we see cultures of intense cultures of high expectation and personal responsibility. for all kids. you can't legislation late that from the federal level. the kind of culture that can

drive high expectations and fourth, we see adequate funding for the teacher program. it makes an enormous difference to help principals make improvements. schools are struggling for that little bit of extra money to make improvement. fifth and finally there's leadership. leadership at the local level, which is inhibited from too many regulations. i think it's a big issue that you are rightly addressing. what i think can improve the bill, the requirement to college and career-ready standards are so important. having somethinging is, most of these schools don't have these expectations. the second, the competitive grant programs focused on

talent. on principals and teachers. the pathways program, trying to train principals and teachers for their institutions. third is the prioritization of low-achieving schools. if you got flexibility, that's a priority in this bill. finally it's important that you got to fix some of the prescription and the mindset of no child left behind. to address leadership at the local level. two issues, two significant concerns about the bill that i would pay a lot of attention to if i were in your shoes in the senate, working on improving this bill, first, lot of discussion about teacher and principal evaluation, i realize some say that should be mandated. i think i would recommend improving on the current bill, by putting in place a very substantial incentive. not a requirement. a very substantial incentive.

perhaps taking as much as 50% of the title ii program to support competitive grants. design and use these systems. someone is building on senator alexander bill. the incentive is there but could be large. you could put up enough funding that every state would be able to get funds. only 42% of title ii right now is used for teacher professional development. i think you could get more funds through this approach to get professional development. right now, title ii isn't working very well. state-driven systems on a competitive basis you get a lot more bang for your buck. i think there needs to more press on the performance targets. thank you. >> thank you very much.

>> you gave me five things, high ek peck takes, cultural responsibility. accurate funding and leadership. what i understand, under cultural and personal responsibility comes the subset of families. in other words, we always focus on schools. we know what influences a kid's ability to learn a desire to learn is what happens outside the school. so, what role does the family play in that list of yours? in those successful schools. >> it's huge. as a dad of a 6-year-old and 4-year-old and 2-year-old, i walk my kid to school every day. the schools that we have seen, driven big results do find ways to really engage parents in taking responsibility to drive improvement for kids. most parents want the best for their kids and a lot of them don't have the support they need.

i think especially are driven by the leader of the school and the teachers they enlist. >> senator alexander? >> thanks, mr. chairman. i would like to thank all of you coming. for making this hearing happen. let me take what mr. schnur said and go to seton from memphis. the bill would be improved with a larger incentive for teacher and principal evaluation. memphis is currently going through a teacher/principal evaluation. almost every teacher is involved in it. and, that's the result of a program that raced to the top that had an incentive for states that wanted to do to teacher and principal evaluation. what's going on?

what's your experience there? how are teachers and principals are responding to it? wh what's role should the federal government have in regulating it? >> good morning. thank you to the chairman for having me here. we in tennessee are actually, i believe, setting the standard nationally, and hopefully, people will start paying attention to what we're doing with regards to evaluations. we know that if you want something you have to inspect it or evaluate it. so, we took the lead with accepting the race to the top, we decided that we were going to look at putting a good teacher, an effective teacher in front of every young person that we have in the state of tennessee. memphis went a state further and we started looking at a number of evaluation models nationally

that were being used and memphis city schools developed or redeveloped, retooled a model and we're using it now. every teacher, every principal, whether they're teaching a student, so that means, administrative personnel, also, are being evaluated. they're looking at a number of issues. they put a rubic together that looks at the actual art of teaching and measures those skills that we believe are effective skills to teach. and it also looks at culture or the teaching domain, where you're at. and i think that we have -- we have seen that, it's caused us as teachers, myself included, to re-evaluate exactly how i'm doing and try to put those high-yield strategies in front of myself. >> you're a special education

teacher, is that right? >> that is correct. i teach special education. it's caused in no child left behind has done a good job of focusing on attention on those areas of special needs children. but, i think -- we see in tennessee, that with have created a culture that is data-driven as well as personnel-driven. we're able to look forward. >> thank you. before i call on the next senator, i think what senator bennett -- let's go to mr. greer. you wanted to have an intervention on this point? >> yes, sir. hit that button. >> thank you so much. good to see you. in houston, we believe that teacher and principal evaluation is .. important to leave to chance. it has to be fixed in this country. as a school superintendent, i

have been leading tri ing distrr district. student performance is not very high. but evaluation writings on almost everyone is off the scale. it has to be fixed. we have to have a teacher and principal evaluation system in this country and in our school systems that give our employees a real, honest picture of what they're doing. last year many houston, we implemented two new evaluation systems. our teacher evaluation system will contain a weight of 15%. as well as will our principal evaluation as we finish it up this year. this past year, as a result of our efforts, we retained and, frankly, we replace 55% of our lowest performing teachers in the district. >> one thing that senator alexander has gotten into my

head is how tough it is to do evaluations and that we don't really have the metrics. that's the proper word that you could use. and what is a good teacher evaluation system? or are there a lot of different things out there? you said that 50% in houston was based on student performance. and you seem to think wharf you're doing in houston is working. is there a template there for the rest of the country? i've been reading articles about tennessee. and they're trying to adopt some kind of evaluation, but it's very difficult. >> it's difficult work. but as we proved in houston, it's not impossible work. when you can retain 92% of your best teachers and you can replace 55% of your lowest performing teachers in a year, that's proof that it's in the seventh largest district in the country, it's not impossible. we had over 2500 teachers involved with us in developing our teacher evaluation system.

this is something we did with our teachers, not to our teachers. >> they were involved in developing this? >> they must be. they just absolutely -- it's critical that they must be. >> if you had that on paper, maybe my staff has it. i'd like to see what you use for the other metrics if you use 50% on student metrics what's the other 50%. >> a lot of is pegogy? >> are students involved? >> students are involved. >> i've often thought one of the best evaluate teacher students do it. we know several things about teacher evaluation. students know who the good teachers are as do the parents. where we struggle in training principles and to have the skill

sets he we and require our teachers to go through appraisal trainin training. >> thank you, mr. chairman, in response to senator alexander's evaluations and incentives. and at some point i would hope to be able to have a discussion also about idaho's state chief views about the law itself, the good parts and the other parts. but when it comes to evaluations and incentives, we know that the most important factor that once a child enters a school by far the most important factor is the quality of the teacher and the classroom. it's by far more important than amount of money spent, the curriculum, the technology, all those are important but by far the most important factor is the teacher in the classroom and so in my state, we went through the process of developing a teacher

performance evaluation that is built upon the framework and i think many would tell you charlotte danielson is definitely an expert in the observations and evaluations in how teachers perform in the classroom. and then 50% of the evaluation now in idaho has to be based on student achievement primarily focusing on growth, parental input has to be part of the teachers' performance evaluation and we've also implemented a statewide pay for performance plan where -- or merit pay as some people would refer to it, where teachers in idaho can earn up to $8,000 a year in bonuses based on taking on leadership roles or if they teach in the hard to fill position but also if they teach in the school that shows high academic growth and so -- and the point i would like to make and it's to answer your question, senator alexander, you asked about evaluations and incentives should the federal government require it, should it define it and regulate it, we did all of this without any

incentive or mandate from the federal government. and if you want to find a balance, i don't see necessarily a problem with the federal government requiring it, but i think it goes too far if the federal government tries to define it or regulate it. i think idaho and other states could demonstrate that we're ahead of the curve when it comes to robust evaluations and incentives so that we don't leave it to chance as to whether every child has a highly effective teacher every year they're in school. >> senator bennett? ms. geiselhart and senator paul. >> thank you, senator chairman. i would like to thank everybody for being here especially mr. seaton and ms. banks. thank you for teaching. senator alexander i spent some time on the phone with your very excellent commissioner of education in tennessee. hearing from him about the evaluations and he sends his regards. >> what did he say?

[laughter] . what? and no one on the table -- i don't think spend as more time what should it look like in this bill ideally if we were to find a path that would allow us to include it is in front >> well, you two in this room have a lot more expertise on the legislative issues. from a school perspective, from a principal teacher/kid sitting in the schools. i think it's vital important and i don't think they necessarily care where they come from. they need supporter outside of

the school for higher performance where too many things. but i'm saying from a school perspective all this conspired for best practices and the schools benefit from the public in some ways saying you can do better. in specific ways. you got to hit bigger goals and we'll have transparency against bigger goals and the best leaders -- they want to do it but there are a lot of people who will be naysayers and so having that support i think is important. so specifically, i think, you know, in my view and i'm sure everyone in this room universally that i do think requiring having performance targets is really important. i think there should be a lot of flexibilities for states in how it's defined as long as they're making big progress and i think it's a great blend in empowering the states in requiring how they be the targets. i think it would be very helpful in the transparency of this. one thing i would just briefly mention where some of the senators you know are launching

an organization america achieves and one is convene a panel of people including former secretary reilly and pete geren and people like edwardo padron and other teachers, great teachers and principals to put recommendations to and what goals and targets should be, early learning, k-12, post-secondary education and getting good thinking out there is important but somewhere in the government level is to ensure there's targets and transparency. >> thank you very much. now, i got miss danks, senator paul, mr. seaton and senator isakson. we could probably talk about performance evaluations and there's other aspects of the bill that we could get to and maybe you're going to bring up some other things, i don't know, but hopefully we can sort of -- perhaps we could have each of them quickly mention what they think is good on the bill and what they think needs

improvement of the bill and then go back to this kind of -- this kind of a format so that nobody gets left out on making their comments. >> okay. let's go to miss danks here first. >> good morning. >> you want to address the performance and evaluation -- >> well, in wanted to respond to your question about how the rubric was created. in baltimore city we recently passed a contract where the teachers are paid for performance and we also went through that process creating a rubric and it took about a year and we had all our stakeholders, administrators, teachers, some family members working together through many drafts to create a rubric that truly defined what highly effective teaching looked like in the classroom and i think having the -- autonomy if the federal government has. and creating a rubric for our specific needs was fantastic. i don't think that our rubric would translate to a lot of school systems just because we are an urban area with a different set of population.

and i do teach at a school for students who are disabled and medically fragile and we're looking to creating our own rubric because the rubric the district created was fantastic and it was fantastic. it had footnotes and explained for every details and for every student that detail is not going to apply and to go through that process alone and define what highly effective looks like for our student population is a great way to ensure that we have highly effective teachers in the classrooms. >> very good. >> i was wanting to speak to the teacher evaluation. i just want to say that there already is an incentive as far as a national board certification. in most states there's incentive pay for that. and that is a marvelous professional development for teachers. and as far as the evaluation, i

think the evaluation definitely needs to be done on the local state level. it's so different, for instance, in memphis and in rural kentucky and it does put a lot of emphasis on local and state decision-making in all areas but as far as teacher quality, teachers are -- well, i shouldn't use that term because that's different in this bill. but as far as evaluation, teachers want to be evaluated because teachers want to improve and that should be the purpose of evaluation is to improve teaching rather than to find fault with teachers and things like that. that is the purpose. and if we can have this where our rubric and things like that give us the needs that we have as teachers to help us improve,

that's what we're looking for but we do very much want to avoid incentives and things like that that cause competition between teachers. and that's a real concern for us as far as teacher evaluation and incentives because in order for schools to be successful and in order for our students to learn, all teachers and all school personnel must work together for the education of the whole child. and we don't want to start -- i think i'm speaking for all teachers in that regard. we don't want to start anything that causes the competition between teachers because we do want to be able to collaborate and work together and be the best that he can with be. >> thank you very much. i think senator ensign made a great suggestion. i would like to start with mr. hess and go down right now. since we finished with senator paul, mr. seaton and mr. isaacson. let's go ahead and i'll ask my question after you go down. >> okay.

you want to go down. i think the senator made a good suggestion. let's just start with mr. hess. so mr. hess, and we'll go down, what are the two or three things that you like and what are the two or three things that you don't like the bill if that's a fair enough question? >> sure. i appreciate the opportunity to be here, mr. chairman. senator enzi, others. for me actually -- unlike john i don't have -- unlike mr. schnur i don't have a lot of opportunity on the ground. i try to spend my time looking at these questions with some perspective. i think if we look back at the federal efforts to improve schooling, some pretty stark lessons stand out that are rarely kind of taken into account. we often spent time talking about whether the federal government should or should not be involved in education. if we go back to the northwest ordinance, land grant, for more

than two centuries we had the federal government involved in some way. for me the much more useful question here is what is the federal government equipped to do well when it comes to american education? i think the federal government is horribly situated to improve schools or improve teaching. it is just atrociously situated because schools are enormously complex organizations. what we've already heard today from several of the folks on the ground for mr. luna, for mr. grier is how much improving teacher accountability, improving teacher evaluation depends not on whether you do it but on how you do it. and the problem is, given this design of the american federal system, and the complexity of state education agencies and local education agencies in schools, is no matter how well intended our efforts in trying to sell out improvement models, trying to stipulate late preparation for principles who will take over turn-around schools and specify evaluation models, long experience teaches me that we're going to wind up

much more in the way of regulation and case law and compliance than we are with fulfillment of the intent of the law. so i would encourage us to be as cautious as possible about trying to spell out interventions or remedies for either schools or teachers. that said, i think there are some particularly useful elements of the law. i think a coherent vision of the federal role recognizes that there are public goods the federal government to my mind is uniquely equipped to provide an education. one is robust and reliable transparency. both around student performance, around outlays and expenditures and around disaggregating this to ensure that we have an x-ray on how well kids everywhere of all kinds are doing. second, the federal government, i think, has an explicit charge to provide constitutional protections for vulnerable population. we do this in i.d.e.a.

title one does this. to my mind the target spelled out in the committee bill is reasonable. jack welch when he ran general electric used to have a mindset that they were going to try to fire the worst 10% of the employees each year. not that he knew that 10% could have been the right number. he just thought 10% was a reasonable target and it strikes me that encouraging states to address those worse 5% each year is not unreasonable so long again as we keep that focus and encouraging states to address it and not on trying to stipulate late models through which they should address it. third, i think there's an enormously useful role in the kind of stuff that was alluded to, to provide cover for state and local leaders who are trying to get out of old systems. often, even when you have super attendance like mr. grier or far sighted union leaders who would like to do things differently they get pulled back for their constituents who ask what's in

it for us. one of the powerful levers of voluntary grants is the answer what's in it for us is we can go out and we can bring a spotlight. we can bring home dollars. and it provides us a chance to leapfrog into the 21st century. and fourth, i think there is a crucial federal role when it comes to basic research. i think senator bennett's forthcoming on arpa ed is coming up. when we think about arpa is figure out how do we leverage basic technological innovations and not get the federal government involved in trying to recommend particular models of implementation. so i hope that's helpful. >> very good. very comprehensive. ms. geisselhardt? >> as far as -- i'm sorry. in regard to what's positive about it, i think first of all in your statements that was made was that no child left behind

was either effective or not. i certainly have to agree with that. and i would like to think of this really as not the reauthorization of no child left behind but the reauthorization of esea. as an educator, just the connotation of the term no child left behind, it's really demoralizing to us at this point because there's so much focus on teaching -- i mean, testing, testing, testing that we have no time to teach. and it really has become that way within the schools. working with gifted education, i run into this all the time because things i want to do with my students, the teachers don't want me take it out of the classroom because they're addressing particular standards that will be tested. for instance, i was taking a students to view a live open heart surgery and one of my teachers was taking -- giving a practice test to practice for

the practice test, to test -- to practice for the test. i mean, that's the way it goes. these students are testing all year-round and it takes so much time from instruction. and as long as we keep our standards and our gap group set up as they are -- i think the gap groups are effective. and i was so thrilled when no child left behind and he'll and we're leaving them behind most of our students because our students that have special needs are not being able to be taught the skills that they need to be taught. our fmd classes where teachers really, really -- didn't really care about these students wanted these students to learn skills that they could use in their

lives, life skills. they can no longer teach those skills because they have to address the standards. these students are going to be tested on the standards. gifted students are left behind totally because they are already proficient and distinguished and so teachers don't feel they can use their time to work with their gifted students so consequently test scores of our gifted students are getting lower and lower. and many of these are the future leaders of our country. and we're not meeting their needs. so those students come to school and go home and have not learned throughout the day. but the real concern of mine -- and i do work with gifted students. but it's what i hear from the special ed. teachers and their concerns that they have that they can no longer -- they deeply care about these students or they couldn't be in these jobs but they cannot address the

needs that these students really need in their classrooms. we have even had an instance where we had a terminally ill special needs child and tried to get an exemption for testing and could not get that, even with a doctor's note saying that the testing -- just the process of testing would be detrimental to the child's health we still could not get an exemption for that child. and their scores were figured in our accountability. we have a student that has a four-word vocabulary that's all he speaks. and one of the phrases that he uses or the terms he uses, i don't know -- he can say yes, no, mom and hell no. that's all he says. and that's -- he's in sixth grade now. that's all he has said throughout his schooling. he's supposed to do a portfolio. yes, it's an alternate portfolio. you know, that's what people say, well, we have alternate portfolios. but how do you do an alternate

portfolio with that? >> thank you very much. mr. luna? >> mr. chairman, just one point of clarification. i think a concern was raised earlier about the fact that incentives could create competition in schools and that could be a negative impact. just so you understand in idaho, when it comes to student achievement, we only go down to the school level. and so actually fosters collaboration and teamwork amongst all the students together because they're working together to help all their students hit an academic goal and if they meet that goal, then all the teachers receive the financial incentive, not just a few teachers in the school. when it comes to no child left behind, no child left behind reminds me of the old clint eastwood movie, the good, the bad and the ugly because there's all of that in the law. i think the good part is it brought us -- it was 10 years ago it brought us to a standards-based education system where we were accountable for every child and we had to have a standardized way of measuring

student achievement. the bad was it was an one size fits all and in a state of i'do which has a ruler state and has ruler communities within that ruler state it was difficult to implement the law. the ugly part is we had a system where the federal government set the goal and then they proscribed to the states what programs and processes we had to use to meet that goal. and if their programs and processes didn't work, we were held accountable. and so, you know, that was the ugly part. and i think that this law, this reauthorization has kept the good parts of no child left behind. in fact, i think it's even improved upon going to a growth model 'cause if we're serious about making sure that every child's needs are met, then a growth model demands that a system not only focus on those students are aren't at grade level but the students that are above because you're obligated to show academic growth for those students also. today once they hit proficiency you're tempted to not focus as much on students that are proficient or higher and still focus on kids that are below

proficiency. the other thing about the law is it recognizes the leadership the states step forward and take. states worked together to hold our students called the common core. it wasn't because it was federally mandated. we chose to work together to create the next generation of assessments, not because it was mandated, but we know what's best for our students and we chose to develop the next generation of accountability. so you have 40 or more states without any federal mandate or incentive have developed a higher standard for our students. we've developed -- we're developing higher assessments to measure our students. and we've come up with our own accountability plan that has had quite a bit of influence on the law that's been drafted. and so i think it's a tenth amendment issue, right, and i think it's recognizing the rights that states have and the responsibilities that states

have. and i'm comfortable with that now more than even 10 years ago because states now have demonstrated that they are more than willing and ready to step up and hold ourselves and our schools to a higher level of accountability. >> very good. thank you. >> thank you senator harkin and senator enzi. i just wanted to say a couple of things from the perspective of easter seals. i think our perspective is that students with disabilities in general have greatly benefited from the elementary and secondary education act because the law requires their achievement be measured and reported. and as a result, more students with disabilities have been afforded the opportunity to learn and master grade level academic content. that has been huge for our kids. the whole notion of they get a chance to try. one of the things -- there are a number of things that we like in the senate bill. the notion of states to adopt

college and careers -- career-ready standards and an assumption of high expectations. we also are very pleased that the bill does not codify the so-called 2% rule, which for us has allowed people to apply very, very low expectations to achievement with students with disabilities. we're pleased with the elements that promote universal design for learning throughout the bill. access to multitiered systems of support including positive behavior interventions, and a notion that early learning can begin at birth and that this bill promotes those things. there are a number of things that we're very concerned about and look forward to working with you to improve them. the bill doesn't change this notion of end size or subgroup size and as a result right now, less than -- about 30% of schools have enough students with disabilities to meet the subgroup category.

so 70% of schools don't even measure -- don't have enough kids according to their subgroup size. we know that lots of kids -- their progress isn't being measured or reported. this law requires 95% of kids to be assessed. so we understand not every kid is going to be at school every day but we know we need that data on subgroup accountability. we really want at the end of the day for all kids to have access to the general education curriculum and for all kids to be held to high expectations. i spent the last four days with 350 easter seals people who around the country and have had story after story after story of families who are told what their kid couldn't do. and they came to us and we were able to help them figure out what they wanted to do. so what i would plea to the committee, don't put in barriers that make it hard for kids to

have access to the general curriculum. before no child left behind, before the elementary secondary education act for kids who have very significant cognitive disabilities we used to hear over and over again that what they were taught were their colors and a family would say, we got this iep and we got goals and my kids are going to learn their colors, yellow, red, green. next year, the goals for my kids iep are colors. you know, my kid knows their colors. we need to move on. and no child left behind the elementary secondary education has given us is form that says every kid deserves the opportunity to make academic progress. so my plea to you is let's continue on to that to make sure there aren't barriers put in place for kids to have access to the general curriculum and access to the things they need to learn and that one of the things we need are teachers who know what they're do