Dam Rehabilitation and Repair Act of 2006 - Amends the National Dam Safety Program Act to require the Director of the Federal Emergency Management Agency (FEMA) to establish a program to provide grants to states for use in rehabilitating publicly-owned dams that fail to meet minimum safety standards and pose an unacceptable risk to the public (deficient dams).
Sets forth provisions regarding procedures for grant awards and fund allocation. Requires the Director to develop a risk-based priority system for identifying deficient dams for which such grants may be provided. Limits the federal share of rehabilitation costs to 65%.
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