California Code, Public Utilities Code - PUC § 31410

If any portion of the corporate area of any city whose corporate area is a part of the district, shall be excluded from such city in accordance with the provisions of law applicable to such exclusions, and, if such area is not within the boundaries of the district as defined in Chapter 2 (commencing with Section 30100) of this part, or, if in another county is not surrounded by territory which is a part of the district, then such excluded area shall thereby be excluded from and shall no longer be a part of the district, but the taxable property within such excluded area shall continue taxable pursuant to Section 30981.