After more than two years of debate and planning at the local and state level, time literally ran out last week on a proposal to impose a one per cent tax increase on the sale of more expensive homes on the Vineyard to pay for affordable housing.

Legislation to create the Martha’s Vineyard Housing Bank never made it to the House floor during the joint legislative session that ended early Friday morning. Although lawmakers approved a bill to allow out-of-state same sex couples to get married and another to tighten corporate income tax codes, two separate bills to create a housing bank on the Vineyard and another on Nantucket were never opened for debate.

The plan to create a housing bank on the Vineyard was approved by all six Island towns at their respective town meetings in 2005. But the bill was then defeated by the state House of Representatives in 2006 by a vote of 91-64, sparking debate about the housing bank concept in both chambers of the state legislature.

Backers of the bill submitted the same legislation after the first defeat without going back to the towns for a new vote. But now that it has been defeated a second time, supporters of the bill and lawmakers agree it will need to go back to Island towns for a new round of discussion and voting.

Modeled after the Island land banks, the housing bank would generate funding for affordable housing projects by taxing real estate sellers one per cent of the transaction price. The first $750,000 of the purchase price would be exempt on the Vineyard, and the first $2 million would be exempt on Nantucket.

Despite support from Island real estate brokers, the transfer tax structure has faced strong resistance from the Massachusetts Association of Realtors and some state lawmakers. Opponents say the surcharge would place an unfair impediment on home ownership and could spread elsewhere in the commonwealth.

It is estimated the measure would raise between $2 to $3 million a year on the Vineyard, or about half the annual amount affordable housing advocates believe they need.

Cape and Islands Rep. Eric T. Turkington, the sponsor of the House bill, said there were indications this year the bill would be approved. When the bill went to a revenue subcommittee, the language was changed to create a cap on the housing bank of six years, which appeared to be a favorable compromise to lawmakers on both sides of the issue.

But Mr. Turkington said the bill languished in the revenue subcommittee for six months and wasn’t approved by the Senate until early last month. Mr. Turkington said he pursued House Speaker Salvatore F. Dimasi for several weeks before finally securing an appointment to discuss the bill. He said the Speaker told him he needed indications the bill had the votes needed for approval.

Mr. Turkington said he then talked to 82 representatives out of 160 who gave him their personal assurances they would support the legislation. But last week’s session had a high number of roll call votes and lengthy discussions that ran out the clock. He said he spoke with Mr. Dimasi several times on Thursday, who said there might not be enough time to bring the bill onto the floor.

The legislative session was supposed to end at midnight Thursday, although the session went until about 1:30 Friday morning. With no time left in the session, the window of opportunity for the housing bank bill had closed for a second time in two years.

Mr. Turkington said he was disappointed.

“We knew from day one this would be a hard sell. But what’s really disappointing is I think we had the votes this time,” he said.

In the end, he said, the wheels of government churned too slowly.

“There are mechanisms of government in place that allow even one [lawmaker] to delay a bill for months. It can be frustrating, but that’s the reality,” he said.

Cape and Islands Sen. Robert O’Leary, who sponsored the bill in the Senate, said he also was disappointed.

“The way it works now is everyone waits around for something to happen, and then all of a sudden we’re all bumping up against this deadline. This practice of putting something off to the last minute has become a way for some [lawmakers] to say no to a bill without actually saying no.”

He continued:

“I know there are arguments on both sides, and I understand why someone from Leominster or Lowell doesn’t support a tax increase that doesn’t benefit their constituents while organized realtor groups back home are strongly opposed. But on balance this is a good plan. There is a unique set of circumstances on the Vineyard because it is surrounded by ocean. You just can’t go up the road and build housing for less money,” he said.

Martha’s Vineyard Savings Bank chief operating officer Richard Leonard, also chairman of the ad-hoc housing bank coalition that has spearheaded the housing bank initiative, said yesterday he was unsure of the coalition’s next move. He said the group will meet in the coming weeks to regroup.

“I can say we’re not giving up. Just because this didn’t pass doesn’t mean the problem of [a lack of] affordable housing has gone away,” he said.

He said the coalition spent no money during the most recent push for approval of the bill. In 2005, the Island Affordable Housing Fund spent over $60,000 in a six-month campaign leading up to the spring town meetings in the six towns. He said some supporters of the bill spent money from their own pockets.

“I personally have been to Boston about six times [in the last year], which comes with a price tag . . . other affordable housing officials have done the same. But we feel it’s worth it,” he said.