IOWA CITY, Iowa -- The federal government has awarded a $16.5-million grant to the University of Iowa to conduct a study in six regions of a mileage-based system to finance highway, bridge and public transit costs.

The regions targeted for the study are San Diego; Austin, Texas; Baltimore; Research Triangle in North Carolina, including Durham, Raleigh and Chapel Hill; Boise, Idaho, and the Iowa counties of Delaware, Dubuque, Linn, Jones, Jackson, Cedar, Clinton, Muscatine and Scott.

Paid study participants will have global positioning systems installed in their vehicles to record miles traveled.

The participants will not pay fuel taxes at the pump, like other vehicles, but will upload their GPS data to a central computer system and be billed according to their mileage traveled.

Tax revenue will then be distributed to regions where the participants traveled.

Driving the study is the notion that the federal Highway Trust Fund that pays for transportation infrastructure receives most of its revenue from per-gallon taxes on gasoline and diesel fuel.

"Over the past 10 years, the motor fuel tax has increasingly failed to generate sufficient funds to repair damaged roads and bridges, fill potholes, and maintain the safe and efficient operation of our highway system," say University of Iowa officials.

Highway user groups and lawmakers have raised privacy concerns about any system that tracks the location and movement of vehicles.

Sen. Barbara Boxer, D-CA, chair of the Senate Environment and Public Works Committee, said in January that the privacy issue could be the deal breaker for a mileage-based tax.

"There are other ways to figure out how many vehicle miles youre using other than having some Big Brother system tracking your every move," Boxer told members of the National Surface Transportation Policy and Revenue Study Commission.

The commission issued recommendations earlier this year calling for the federal government to raise fuel taxes significantly in the short term but phase them out by 2025 in favor of a mileage-based tax.

University of Iowa officials are well aware of the privacy concerns.

"It is likely that acceptability of the new approach will depend to a large extent on perceptions regarding privacy," say university officials, acknowledging that it would be possible that records could be "subpoenaed in criminal or civil cases involving the owner of a vehicle."

"Because the trade-off between privacy protection and auditability is one of the key issues we are addressing in this national evaluation study, we will enable participants to experience each method during the course of the field-testing."