To amend the Internal Revenue Code of 1986 to provide a nonrefundable credit for the purchase and installation of Mode C equipment for transponders used in aircraft, and to require a study of such equipment by the Federal Aviation Administration.

Amends the Internal Revenue Code to provide a nonrefundable tax credit for the purchase and installation of Mode C equipment for transponders used in aircraft. (Describes Mode C equipment as certain equipment in a transponder which gives it automatic altitude reporting capacity.)

Requires the Administrator of the Federal Aviation Administration to report to specified congressional committees on the average cost of installing such equipment in general aviation aircraft.