Carrboro Alderman Joal Broun sparked discussion on the issue at Tuesday's Board of Aldermen meeting after Chapel Hill Town Council member Joyce Brown initially suggested the idea at last week's council meeting.
Although the issue has been discussed in previous years, officials have never approved similar proposals.
Brown requested that council staff compile a report examining transit advertising and make it available to the full council by the end of the month.
The Board of Aldermen also will receive a written transcript of the council's discussion and its report on the matter.
Brown said she hopes to use the revenue generated from advertising on buses to fund alternative fuel vehicles for the town.
But Broun said she hopes Carrboro would use the revenue to fund its share of fare-free busing costs when transit service becomes free Jan. 1, 2002.
Fare-free service will be financed by transit funds from Chapel Hill and Carrboro and a student fee increase, expected to go into effect by fall 2002.
"We need to look at every avenue so we can support the bus system," Broun said. "The bus system is an important area for making our town a good place to live."
Alderman Mark Dorosin agreed, saying Carrboro would need additional revenue to fund fare-free busing.