Water Resources Planning and Modernization Act of 2006

Water Resources Planning and Modernization Act of 2006 - Directs: (1) the Water Resources Council to report to the President and Congress on U.S. vulnerability to damage from flooding and related storm damage, including the risks to human life and property and the comparative risks faced by different regions of the country; and (2) the Administration to submit a report responding to, and including proposals to implement, the Council's recommendations.

Requires the Council: (1) to submit initial and followup reports to Congress containing a prioritized list of Corps of Engineers water resources projects, based on specified criteria; and (2) in coordination with the National Academy of Sciences, to propose revisions to the planning principles and guidelines, regulations, and circulars of the Corps to improve the process by which the Corps analyzes and evaluates projects.

Includes as members of the Council the Secretary of Homeland Security and the Chairperson of the Council on Environmental Quality.

Subjects projects meeting specified guidelines to review by an independent panel of experts. Requires the Inspector General of the Army to appoint within the Inspector General's Office a Director of Independent Review.

Requires the Secretary, to mitigate losses to flood damage reduction capabilities and fish and wildlife resulting from a water resources project, to ensure that mitigation for each project fully complies with the mitigation standards and policies established by each state in which the project is located. Sets forth mitigation plan requirements. Directs the Secretary to establish a mitigation tracking system.