California Code, Public Utilities Code - PUC § 17367

(a) That the territory to be annexed shall not become liable by assessment or otherwise (1) for any of the outstanding obligations of the annexing district; (2) for any expense incurred in acquiring property used or to be used for the servicing of any land within the exterior boundaries of the annexing district as they then exist; (3) for any costs or charges incurred in connection with the replacement or construction of any utility system or for the delivery of any commodity or service within the annexing district.

(b) That the land to be annexed shall be subject to such assessments and charges as required to provide (1) for any utility system or property necessary to serve the annexed land; (2) for the costs of maintaining, servicing, and operating such properties.

(c) That the liability of the land to be annexed may be limited solely to the fixing and collecting of charges for utilities or commodities actually supplied to the petitioning district by the annexing district.