An improvement district may be formed to undertake any project for any one or more of the purposes stated in Section 6512 that is of special benefit to the area of such improvement district, including in any such project, any required investigation, study, analysis, appraisal or financing plan.

The formation of an improvement district shall be initiated by a resolution of the district board which shall contain all of the following:

in such resolution, which shall be not less than 15 nor more than 60 days after the date of adoption of the resolution initiating formation proceedings.

Except as otherwise provided in this article, notice of the election shall be given and the election shall be held and conducted in the same manner as elections for the authorization of bonds of the entire sanitary district, and if two-thirds of the votes cast are in favor of incurring the bonded indebtedness, as proposed, bonds of the district, issued in the name of the district and designated “Bonds of ____ (naming the sanitary district) for Improvement District No. __”, shall be issued and sold for the amount stated in the resolution calling the election in the same form and manner as bonds of the entire sanitary district. Each bond of the district for an improvement

district and all interest coupons thereof, shall state that taxes for the payment thereof shall be derived exclusively from an annual tax upon the taxable property in the improvement district.

No irregularities or informalities in conducting such election shall invalidate the same, if the election shall have otherwise been fairly conducted. Any action or proceedings, wherein the validity of the formation of the improvement district or of any bonds issued for it or of the proceedings in relation thereto is contested, questioned or denied, shall be commenced within three months from the date of such election; otherwise, such bonds and all proceedings in relation thereto, including the formation of the improvement district, shall be held to be valid and in every respect legal and incontestable.

Any moneys required to be raised from taxes for the purpose of paying the principal of and interest on bonds of the district for an improvement district shall be derived exclusively from an annual tax upon the taxable property in the improvement district of such sanitary district, and all the taxable property within the improvement district of such sanitary district shall be and remain liable to be taxed for such payments. The district board shall annually, at the time and in the manner of levying other district taxes, levy and cause to be collected a tax upon the taxable property in the improvement district, based upon the last equalized assessment roll of the district,

sufficient to pay the interest on the bonds for that year and such portion of the principal as is to become due before the time for making the next general tax levy. Such bonds and the interest thereon shall not be taxable in this state.

Subject to such limitations as may be contained in the resolution declaring the improvement district to be formed, the district board shall have the power in any year to cause taxes to be levied and collected in any improvement district to finance any project of such improvement district and to pay the costs of administration, maintenance, and operation of any works or facilities of, or for, such improvement district.

The procedure for levying and collecting taxes in any improvement district shall be the same as is provided in Chapter 7 (commencing at Section 6695) of this part for taxes on property in districts.

All taxes collected pursuant to this article shall be expended only for the payment of bond principal and interest, or only for the improvement district project for which levied, except that any surplus tax proceeds levied otherwise than for payment of bond principal and interest which remain after the completion of any improvement district project for which levied shall be transferred to the bond interest and redemption fund of such improvement district, if any, otherwise to the district’s general fund.

For the purpose of any tax levied under this article, the properties within any improvement district shall be deemed to be equally benefited.

Territory within a district, but not a part of an improvement district created pursuant to this article, may be annexed to such improvement district whether or not contiguous thereto.

Annexation of territory to an improvement district shall be initiated by a resolution of the district board which shall contain at least all of the following:

after the date of adoption of the resolution initiating annexation proceedings.

The resolution shall be published and notice of the hearing on the proposed annexation shall be given, in the manner required by Section 6550.3, except that in applying such section the words “improvement district” shall mean the territory proposed to be annexed.

The hearing on the proposed annexation shall be held in the manner required by Section 6550.4, except that in applying such section the words, “improvement district” shall mean the territory proposed to be annexed.

The district board shall have the power to change the boundaries of territory proposed to be annexed to an improvement district, but shall not include any territory which, in its judgment, will not be benefited by inclusion within the improvement district, nor shall it exclude any territory which it finds would be benefited by inclusion within the improvement district.

If the district board proposes to change the boundaries of the territory proposed to be annexed by adding territory thereto, it shall give notice thereof in the manner provided in Section 6550.19. Owners of land within the affected territory shall be given an opportunity to appear before the district board pursuant to Section 6550.20 and to register any protests.

At the conclusion of the hearing, the district board may, by resolution, order the annexation to the improvement district of such territory as it determines will be benefited by inclusion therein.

If all the owners of land within the territory proposed to be annexed have given their written assent to such annexation, the board may, by resolution, order such an annexation without notice and hearing by the board.

After the adoption of a resolution ordering such annexation, or a resolution confirming an order of annexation following an election thereon, the secretary shall file a certified copy thereof with a map of the territory thus annexed with the county assessor and the county tax collector of each county in which such annexed territory is situated and with the State Board of Equalization.

Territory annexed to an improvement district shall be subject to existing bond issues and indebtedness of the improvement district from and after the filing with the county assessor specified in Section 6550.25.