FAA Air Transportation Modernization and Safety Improvement Act

Title I: Education Jobs Fund - Authorizes appropriations for the necessary expenses for an Education Jobs Fund and appropriates $10 billion for such purpose.

Requires the allocation of such funds to states by the Department of Education in accordance with provisions of title XIV (State Fiscal Stabilization Fund) of Division A of the American Recovery and Reinvestment Act. Requires that allocated funds be used solely: (1) to make awards to local educational agencies for the support of elementary and secondary education; and (2) for compensation and benefits and other expenses to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services. Imposes limits on the expenditure of funds for administrative purposes. Prohibits states from using allocated funds for establishing, restoring, or supplementing a rainy-day fund or for debt reduction.

Requires the Secretary of Education, not later than 45 days after the enactment of this Act, to award funds appropriated under this title to states that have submitted approvable applications. Allows the Secretary to award funds to other entities in a state if the governor of such state has not submitted an approvable application within 30 days after the enactment of this Act.

Prohibits the Secretary from allocating funds to a state unless such state provides an assurance that it will maintain levels of support for elementary and secondary education in effect in prior fiscal years. Imposes additional requirements on the state of Texas relating to levels of support for elementary and secondary education.

Title II: State Fiscal Relief and Other Provisions; Revenue Offsets - Subtitle A: State Fiscal Relief and Other Provisions - (Sec. 201) Amends the American Recovery and Reinvestment Act of 2009 to extend through the first three calendar quarters of 2011 the Federal Medicaid Assistance Percentage (FMAP). Reduces to 3.2 % the percentage increase in FMAP in the second quarter of FY2011, and to 1.2% in the third quarter of FY2011. Extends until December 31, 2010, the additional increases in FMAP based upon increases in state unemployment rates.

Amends title XIX (Medicaid) of the Social Security Act to include in the Medicaid average manufacturer price any drug that is an inhalation, infusion, instilled, implanted, or injectable drug that is not generally dispensed through a retail community pharmacy.

Terminates after March 31, 2014, the temporary increase in funding for the supplemental nutrition assistance program (food stamps) enacted by the American Recovery and Reinvestment Act of 2009.

Subtitle B: Revenue Offsets - Amends the Internal Revenue Code, with respect to the taxation of foreign income and the foreign tax credit, to: (1) suspend the recognition of foreign tax credits until the related foreign income is taken into account for U.S. tax purposes; (2) deny a foreign tax credit for foreign income not subject to U.S. taxation due to a covered asset acquisition (defined as an acquisition that results in an increase in tax basis for U.S. tax purposes but not for foreign tax purposes); (3) apply a separate foreign tax credit limitation for each item of income that would be treated as derived from sources within the United States and that would be treated as arising from sources outside the United States under a treaty obligation (if the taxpayer chooses the benefits of such treaty); (4) limit the amount of foreign tax credits that may be claimed by a U.S. domestic corporation with respect to a deemed dividend paid by a foreign subsidiary; (5) prevent a reduction in earnings in profits of a foreign corporation in an acquisition if more than 50% of the dividends arising from such acquisition would not be subject to U.S. taxation or would be includible in the earnings and profits of a controlled foreign corporation; (6) treat a foreign corporation as a member of an affiliated group for interest allocation and apportionment purposes if more than 50% of its gross income is effectively connected with a U.S. trade or business and at least 80% of either the vote or value of its outstanding stock is owned directly or indirectly by members of the affiliated group; (7) repeal tax rules exempting foreign source income attributable to the active conduct of a foreign trade or business from withholding of tax requirements; and (8) provide that the statute of limitations for failure to provide information to the Internal Revenue Service (IRS) on certain foreign transactions shall not be tolled if such failure is due to reasonable cause and not willful neglect.

Eliminates provisions that provide for the advance refundability of the earned income tax credit.

Title III: Rescissions - Rescinds appropriated amounts from specified federal agencies, programs, and accounts, including: (1) Department of Agriculture - Rural Development; (2) Department of Commerce - National Telecommunications and Information Administration - Broadband Technology Opportunities Program; (3) Department of Defense (DOD) procurement, research, development, test, and evaluation, operation and maintenance, and the Defense Health Program; (4) Department of Energy (DOE) - Nuclear Energy and the Innovative Technology Loan Guarantee Program; (5) Nuclear Regulatory Commission (NRC); (6) General Services Administration (GSA); (7) Bureau of Indian Affairs; (8) Environmental Protection Agency (EPA) - Hazardous Substance Superfund, Leaking Underground Storage Tank Trust Fund Program, Environmental Programs and Management; (9) National Park Service; (10) Fish and Wildlife Service; (11) unobligated funds in the Public Health and Social Services Emergency Fund; (12) Social Security Administration (SSA); (12) Department of Education - Education for the Disadvantaged, Student Aid Administration, Innovation and Improvement; (13) Department of Veterans Affairs, general operating expenses; (14) Information Technology Systems; (15) Department of State, Millennium Challenge Corporation and Civilian Stabilization Initiative; (16) Department of Transportation (DOT) - Federal Aviation Administration (FAA), facilities and equipment; and (17) statewide transportation planning programs.

Title IV: Budgetary Provisions - Provides for compliance of the budgetary effects of this Act with the Statutory Pay-As-You-Go Act of 2010.