(a) Eligible activity shall mean joint provision of any specific municipal facility, service, activity, project or undertaking or the cooperative performance or exercise of any specific function or power which each of the municipal corporations or districts has the power by any other general or special law to provide, perform or exercise separately.

(b) No single grant shall be in excess of $20,000. The study shall be of such magnitude as to make a significant impact on the local government units when carried out. The report shall consider specific municipal problems rather than generalized studies of governmental procedures. Applications proposing studies of refuse removal and disposal, sewers and sewerage disposal, water supply and distribution, the creation, dissolution, organization or reorganization of local governments and those proposing studies of municipal boundaries or annexations, shall not be eligible for assistance.