As used in this title, the following terms shall mean and include:

2. "Construction". The erection, building, acquisition, alteration, reconstruction, improvement or extension of sewage treatment works; the inspection and supervision thereof; and the engineering, architectural, legal, fiscal and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures, and other actions necessary thereto;

3. "Eligible project". A water quality improvement project for the construction of sewage treatment works,

a. for which a permit has been issued by the department,

b. which is, in the judgment of the commissioner, in accord with applicable comprehensive studies and reports,

c. which is approved for federal pollution abatement assistance,

d. which conforms with applicable law, rules and regulations, and

e. which is, in the judgment of the commissioner, necessary for the accomplishment of the state water pollution control program;

4. "Federal pollution abatement assistance". Funds available to a municipality, either directly or through allocation by the state, from the federal government as grants for construction of sewage treatment works, pursuant to the federal water pollution control act and acts amendatory thereto;

5. "Municipality". A city, county, town, village, the New York state environmental facilities corporation, a sewer authority within a city, or an improvement district or district corporation within a city, county, town or village, or Indian tribes residing within New York state, or any combination thereof;

6. "Project cost". The actual cost or estimated reasonable cost, whichever is lower, of construction of an eligible project;

7. "Water quality improvement project". A sewage treatment works for the purpose of treating, neutralizing or stabilizing sewage, including treatment or disposal plants, the necessary intercepting, outfall and outlet sewers, pumping stations integral to such plants or sewers, equipment and furnishings thereof and their appurtenances.