Dam Safety Act of 2006 - Amends the National Dam Safety Program Act to require (currently, authorizes) the Secretary of the Army, acting through the Chief of Engineers, to maintain and update information on the inventory of dams in the United States, including an assessment of each dam based on inspections completed by either a federal agency or a state dam safety agency.
Requires the strategic plan for dam safety prepared by the Director of the Federal Emergency Management Agency (FEMA) to establish performance measures, in addition to goals, priorities, and target dates, toward effectively administering the Act to improve dam safety.
Authorizes appropriations for the National Dam Safety Program, the National Dam Inventory, research, training, and staff. Sets forth a formula for the allocation of funds among eligible states, based partly on the number of dams in a state relative to all states. Limits the amount allocated to a state to 50% of the reasonable cost of implementing the state dam safety program. Provides that the Director and the National Dam Safety Review Board shall determine the amount allocated to states. Prohibits the use of funds to construct or repair any dam.