California Code, Streets and Highways Code - SHC § 5840

If any portion of the territory annexed to a maintenance district comprises a portion of another maintenance district formed under the provisions of this chapter, a highway lighting district organized pursuant to Part 4 (commencing with Section 19000) of Division 14, or a sewer maintenance district formed under the provisions of Chapter 4 (commencing with Section 4860), Part 3, Division 5 of the Health and Safety Code, the annexation of such territory shall not become complete unless and until any outstanding contract of the other district of which such territory is a part has expired or such contract, with the consent of the parties thereto, has been modified or canceled so as to relieve the other district of further obligation to pay for futurecontract obligations within the portion of the territory so withdrawn, and the funds of such other district remaining on hand upon the completion of such annexation shall have been apportioned between the maintenance district to which the territory was annexed and the other district from which it was withdrawn.  The division of such funds shall be prorated in the proportion that the assessed value of the real property of the territory so withdrawn bore to the total assessed value of the real property within the district prior to such withdrawal.