Mileage-based tax under consideration

WASHINGTON, May 5 (UPI) -- The Obama administration is considering a plan that would require the study and execution of a plan to tax U.S. drivers based on the amount of miles they drive.

The plan is included in the administration's Transportation Opportunities Act and follows a Congressional Budget Office report backing the idea of taxing drivers based on miles driven, The Hill reported Thursday.

In its report, the CBO said a vehicle miles-traveled tax could be tracked by installing electronic equipment on vehicles to determine how many miles were driven and payments could be made electronically at gas stations.

Senate Budget Committee Chairman Kent Conrad, D-N.D., who proposed taxing cars by the mile to increase federal highway revenues, sought the CBO report.

Obama's proposal appears to track that concept in the draft bill, a copy of which was obtained by Transportation Weekly. That section would create within the Federal Highway Administration a Surface Transportation Revenue Alternatives Office tasked with creating a "study framework that defines the functionality of a mileage-based user fee system and other systems," The Hill reported.

The proposed office would include a public relations function, which the draft said should "increase public awareness regarding the need for an alternative funding source for surface transportation programs and provide information on possible approaches."

The office would be required to conduct field trials to examine four factors -- the capability of states to enforce payment, the reliability of technology, administrative costs, and "user acceptance," The Hill said. The new office would get $200 million through fiscal year 2017 for the project.