A bill to establish a housing bank to fund affordable housing on the Island has cleared the Massachusetts House and is before the state Senate for consideration after failing in the House two years ago.

Rep. Eric Turkington, who represents the Vineyard, said this week he is heartened by the favorable vote by the House finance committee to create the fund, now before the Senate, that could create $2 million a year in affordable housing funds for the Island.

The housing bank would be based on the model of the Martha’s Vineyard Land Bank, which taps a surcharge on Island property transfers to fund the purchase of open space.

A vote on the housing bank bill has not been scheduled. Mr. Turkington said House legislators and bill proponents are working to build support for House ratification.

He and Sen. Robert O’Leary, who represents the Cape and Islands, filed separate bills for Nantucket and the Vineyard. The Nantucket bill also moved out of the committee and is now before the Senate.

The Vineyard bill would create a housing bank, a housing bank administration commission and would be funded by a one per cent tax on Island home sales of more than $750,000.

The plan was developed and is supported by affordable housing organizations, realtors and bankers across the Vineyard, Mr. Turkington said. In 2005, the six Island towns supported the concept in non-binding referenda at annual town meeting.

The new plan would exact a one percent tax on the seller. Based on sales in 2006, the housing bank, had it existed, would have generated an estimated $2 million toward affordable housing in 2007.

Mr. Turkington said some education will be necessary.

“The legislature is saying no to the governor on new tax bills and to some [legislators], this may look like a tax bill although it isn’t,” he said. The representative said the plan is not a broad-based tax measure but affects only higher-end property transactions on the Island.

The bill provides for a housing bank commission of seven voting members, including one legal resident from each Island town and a seventh member appointed by the director of the Massachusetts Department of Housing and Community Development.