CONCORD — New Hampshire is getting into do-it-yourself employment.
Gov. Maggie Hassan yesterday signed into law the “Pathway to Work” bill to help people start their own businesses while they are receiving unemployment.
The state’s Small Business Development Center will assist laid-off workers with entrepreneurial training, business counseling and technical assistance.
Sen. Sylvia Larsen, D-Concord, prime sponsor of the bill, told a Senate panel last winter the program could benefit older, experienced workers struggling to find work.
“What is missing in our current unemployment compensation system is an option during the time of unemployment for someone who wants to start his or her own business,” Larsen testified. “Pathway to Work would correct that glaring omission in a state that values entrepreneurism and self-reliance.”
While billed as a no-cost program to the state, a legislative analysis concluded it’s actually low cost, pegging the annual expense to the state at less than $10,000.
New Hampshire Employment Security general counsel Maria Dalterio, in testimony before the Senate panel, said participation would be capped at 5 percent of those receiving unemployment benefits, or about 600.
Applicants will have to show they have financial resources and a business plan to get started, she told senators.
“We could analyze well whether the person is likely to succeed,” she testified.
State employment officials also must conclude the applicant is likely to exhaust unemployment benefits.
Participants will have to have at least 18 of their 26 weeks of benefits remaining to get into Pathway to Work.
But the state would excuse them from the requirement of actively seeking work, as long as they were trying to start their own business.
Larsen said other states have had a 60 percent success rate with similar programs.
John Post, a mentor with Merrimack Valley NH SCORE, the free business startup advisory group, said the Pathway program could help if it directs people to established resources.
“We’re all trying to get the word out there,” Post said of SCORE, the federal Small Business Administration and other organizations.
Starting a business is challenging, he acknowledged.
“In my experience doing SCORE for over 10 years, with several hundred clients, they all need some counseling, whether they are unemployed or they think they know it all,” Post said.
Entrepreneurs may miss things or not have their priorities right, he said.
He acknowledged unemployed workers will face obstacles.
“Banks are very, very tight with money and these people are very high risk,” Post said.
Pathway to Work easily passed the Senate, 19-5, and House, 183-149.
Most House lawmakers and a majority of senators from Rockingham County opposed the legislation.
Rep. Patrick Bick, R-Salem, said he was troubled by the prospect of someone starting a business while collecting unemployment.
“If a person starts their own business, they shouldn’t be able to collect public money,” Bick said.
Rep. Frank Sapareto, R-Derry, described the bill as “feel-good type of legislation” that did have an expense for the state.
“If I don’t see the balance on the checkbook,” he said, “I’m reluctant to support it.”
Sapareto said lawmakers generally were opposing new spending as the session wound down, while the Republican caucus preferred to deal with the unemployment problem by creating jobs through tax credits to business.
Republican senators wanted assurances people wouldn’t use the program to take advantage of the unemployment system.
Larsen told them people only would get into Pathway to Work by first getting laid off from their jobs.
“I don’t think that’s much of an incentive for most people,” she testified.
Hassan, who as a senator partnered with Larsen in development of the New Hampshire Working Program to help people in the job market, praised this expansion of the state’s effort to aid the unemployed.
“This new law will help Granite Staters create good jobs and build a more innovative economic future,” Hassan said.
People will be able to apply at the Employment Security offices in Salem and throughout the state.
“The program is effective immediately,” Hassan spokesman Marc Goldberg said.
A two-page application asks about the business plan, self-employment experience, skills, target customers and potential partners.
They must complete a mandatory orientation and can work part-time, if it doesn’t interfere with plans to start a business.
The bill signing came with New Hampshire’s unemployment rate at 5.3 percent, but economists have said the state recovery is lagging that of Massachusetts and other New England states.
The stock market yesterday stood in record territory, as the state and nation continued a five-year climb from a financial sector crisis that left the economy in its worst shape in 80 years.