From a news release:
Senator Thune [R-South Dakota] recently introduced the Flex-Fuel for All Americans Act of 2008, which would create a temporary consumer tax credit for the purchase of a flexible fuel vehicle. Flex-fuel vehicles are capable of running on either E-85 (85 percent ethanol), a blend of 85 percent methanol, or biodiesel.
This legislation would give consumers a tax incentive to purchase flex-fuel vehicles, thereby reducing demand for imported oil, as well as spurring innovation in flex-fuel technology. Additionally, the market for homegrown renewable fuel will grow as more flex fuels are produced.
Senator Thune's legislation would create a tax credit of $1,000 per eligible vehicle. If a flex-fuel vehicle is certified by the Environmental Protection Agency to get equal or better gas mileage on E-85 or biodiesel relative to regular gasoline, the tax credit would be increased to $1,500. The tax credit would begin on January 1, 2009 and expire on December 31, 2015.