Any public agency not included within the boundaries of a district may be annexed to the district in the manner provided in this chapter or in the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Division 3 (commencing with Section 56000) of the Government Code). When proceedings for an annexation are taken pursuant to this chapter, only the provisions of this chapter shall apply to that annexation.

The legislative body of the public agency proposed to be annexed shall agree in writing with the board upon the terms and conditions of annexation, which agreement (among other things) may provide for any of the terms and conditions authorized by the District Reorganization Act of 1965 (commencing at Section 56000, Government Code). The corporate boundaries of the public agency to be annexed need not be coterminous with any election precincts.

The terms and conditions of annexation may provide, among other things, for the levy and payment of taxes within the territory to be annexed in addition to the taxes authorized elsewhere in this division, for the fixing of rates, rentals, and charges differing from those fixed or existing elsewhere within the district, or for the making of one or more payments, or the transfer of real or personal property or other assets to the district by the public agency. Such payments may be either for the acquisition, transfer, use or right to use all or any part of the existing property of the district or for installation and construction of facilities and equipment required to serve the annexed territory.

After the legislative body of the public agency and the board have concurred upon the proposed terms and conditions, the secretary or clerk of the public agency to be annexed shall file a certified copy of the proposed agreement with the executive officer of the local agency formation commission.

After the filing of the proposed agreement with the executive officer, proceedings thereon shall be taken by the local agency formation commission in the manner and subject to the provisions of Part 4 (commencing at Section 56250, Government Code) of the District Reorganization Act of 1965. If the proposed annexation and agreement are approved by the commission, with or without amendment, wholly, partially or conditionally, it shall be mandatory for the board and the legislative body of the public agency to complete the proceedings for such annexation, subject to compliance with the commission’s resolution making determinations.