The transient occupancy tax would be similar to what the state imposes on hotel rooms.

That means it wouldn't fall heavily on isle residents - unless they have bought isle vacation condominiums in which the shared owners occupy the unit during specified times during the year.

Depending on how the time-share tax is shaped, it could raise between $20 million and $30 million, said Senate Consumer Protection Co-Chairwoman Rosalyn Baker (D, Lahaina). Yesterday, in separate actions, Baker's panel and the House Tourism Committee advanced bills that would impose a time-share tax.

Such a tax could take on added importance this legislative session, a number of lawmakers believe. Echoing the concerns of some of his colleagues, Senate Consumer Protection Co-Chairman David Ige (D, Pearl City) acknowledged there are fears that Gov. Ben Cayetano's plan to balance the $11.5 billion operating budget for the upcoming biennium appears to have a number of holes.

So it makes sense to consider a time-share tax, Ige explained.

Added Baker, "There are not a lot of revenue generators out there."

House Tourism Chairman Romy Cachola (D, Kalihi) said: "The state is short funds. We've got to look at all the alternatives."

Baker said she also sees a time-share tax as fair, subjecting the key housing segments of the visitor industry to the same rules.

Firms also are converting hotel rooms to time shares, which creates a drain on hotel room tax revenue, Baker added.

According to the American Resort Development Association, which promotes time shares, the industry has 60 resorts with a total of 3,248 units in the state. Time-share owners spend $368.2 million annually in the isles, association officials said.

Sen. Sam Slom (R, Kalama Valley), the sole Consumer Protection member to vote against the proposed tax, said time-share use isn't comparable to hotel occupancy. Time shares involve ownership, whereas hotel occupancy is transient, he contended.

"I will not support any tax increase. Period," Slom said.

Baker countered that time sharing is not different from using a hotel because in the case of time shares, one is simply prepaying for vacation accommodations.

Cachola said the House is seeking an opinion from Attorney General Margery Bronster to determine if there is any validity to the assertions of the time-share industry that a time-share tax would be unconstitutional.

Honolulu attorney Mitchell Imanaka, who has represented time-share developers, contends that a tax would violate the equal protection clauses of the U.S. and state constitutions.

Time-share owners are different from hotel guests because, Imanaka argued, time-share owners pay property taxes and maintenance fees and face the risk of a devaluation of their vacation lodgings. On all of those counts, hotel guests don't, he said.

The proposed tax, adamantly opposed by the time-share industry, is supported by the Hawaii Hotel Association, Maui Mayor Linda Crockett Lingle, Maui Council Chairman Patrick Kawano and the Maui Visitors Bureau.

For years, Maui has been plagued with problems related to the time-share business.

HHA's Murray Towill said it is difficult to support taxing another business group. But the time-share business hasn't been paying its fair share of taxes, he said.

Last year, the hotel and condominium industry paid $124 million in the hotel room tax plus an additional $10.4 million in property taxes because hotels are taxed at a higher rate than other businesses in Honolulu and on Maui, Towill said.