Air Cargo Security Improvement Act

(Sec. 4) Directs the Under Secretary to conduct random audits, investigations, and inspections of indirect air carrier facilities to determine if the indirect air carriers are meeting the security requirements of this Act.

Authorizes appropriations.

(Sec. 7) Directs the Secretary of Homeland Security to report to specified congressional committees on the potential impact of TSA's proposed Computer Assisted Passenger Prescreening system (CAPPS II) on the privacy and civil liberties of U.S. citizens.

(Sec. 8) Requires a background check of alien flight school applicants without regard to the maximum certificated weight of the aircraft for which they seek training (including in-flight training, training in a simulator, and any other form or aspect of training, except classroom instruction). (Currently, a background check is required for aircraft with a maximum certificated takeoff weight of 12,500 pounds or more.) Exempts from such requirement any alien who: (1) has earned a Federal Aviation Administration (FAA) type rating in an aircraft; or (2) holds a current pilot's license that allows the person to fly an aircraft with a maximum certificated takeoff weight of more than 12,500 pounds. Requires overseas U.S. Embassies and Consulates that have fingerprinting capability to provide fingerprinting services to such aliens if the Attorney General requires their fingerprinting and to submit the fingerprints to the Department of Justice (DOJ) and any other appropriate agency. Prohibits the Attorney General from interrupting or preventing the training of such alien who commenced training on aircraft with a maximum certificated takeoff weight of 12,500 pounds or less before, or within 120 days after, the enactment of this Act, unless the Attorney General determines that such alien represents a risk to aviation or national security.

Requires the Secretary of Transportation and the Attorney General to report jointly to specified congressional committees on the effectiveness of the background check requirement.

(Sec. 9) Requires the Under Secretary to develop guidelines to provide air carriers guidance in detecting false or fraudulent passenger identification, taking into account the use of new technology, current identification measures, training of personnel, and issues related to the types of identification available to the public.

(Sec. 10) Authorizes the Under Secretary to establish a program to require the installation and use at U.S. airports of identification verification technologies to assist in the screening of passengers boarding aircraft. Allows such identification verification technologies to include identification scanners, biometrics, retinal, iris, or facial scanners, or any other technologies deemed appropriate for the program.

(Sec. 11) Directs the Under Secretary and the Administrator of the FAA to report jointly to Congress on the use of blast-resistant cargo container technology on passenger aircraft.

(Sec. 12) Expresses the sense of Congress that a flight deck crew member of a cargo aircraft should be armed with a firearm to defend the aircraft against attacks by terrorists that could result in its use as a weapon of mass destruction or for other terrorist purposes.

Authorizes the training and arming of flight deck crew members (pilots) of all-cargo air transportation flights to prevent acts of criminal violence or air piracy.

(Sec. 13) Directs the Secretary of Homeland Security to report to specified congressional committees on how best to defend turbo and jet passenger aircraft from Man-Portable Air Defense Systems (shoulder-fired missiles), including actions taken to date, countermeasures, risk mitigation, and other activities.