Corps of Engineers Modernization and Improvement Act of 2004

Corps of Engineers Modernization and Improvement Act of 2004 - Amends the Flood Control Act of 1970 to require: (1) the Secretary of the Army to revise the planning guidelines, regulations, and circulars of the Corps of Engineers to comply with specified requirements, including encouraging ecosystem restoration; and (2) the Corps to develop and annually update an integrated national plan to manage, rehabilitate, and modernize inland waterway and port infrastructure to meet specified needs.

Directs the Secretary to ensure that each feasibility report, general reevaluation report, and environmental impact statement of a water resource project is subject to review by an independent panel of experts if: (1) the project has an estimated total cost of more than $25 million; (2) the Governor of an affected State requests such review; (3) the head of a Federal agency charged with reviewing the project determines that it is likely to have a significant adverse impact; or (4) the Secretary determines that the project is controversial.

Directs the Inspector General of the Army to appoint a Director of Independent Review. Permits the Secretary to recommend a project for congressional authorization only if it has projected national benefits that are at least 1.5 times as great as the estimated total project costs. Establishes full mitigation requirements for losses of aquatic and terrestrial resources, fish, and wildlife.

Directs the Secretary to establish: (1) a record-keeping system to track each project constructed, operated, or maintained by the Secretary; and (2) a mechanism for decommissioning waterways that are no longer economically justified or that are no longer in the national interest.