Cal. Government Code - GOV § 58950. Section 58950.
If territory has been detached from a district and that detached territory is subject to terms and conditions imposed by the local agency formation commission pursuant to Section 56886 and those terms and conditions require that the detached territory continue to be taxed for the payment of principal and interest on outstanding bonds of the district, the governing body of the district from which the territory was detached may absolve and relieve the detached territory of its annual tax liability as follows:
(a)
The district board shall, by resolution, declare its intention to relieve the detached territory of its annual tax liability for payment of principal and interest on outstanding district bonds. The resolution shall describe the detached territory, specify the annual liability the territory will be relieved of, state the reason or reasons why the detached territory should be relieved, and fix a time, date, and place for a public hearing on the proposed relief of liability.
(b)
The district board shall cause notice of the hearing to be published pursuant to Section 6066 in a newspaper of general circulation published in the territory of the district and the detached territory. The notice shall contain all the information specified in subdivision (a), and in lieu of notice the district board may cause a copy of the resolution required in subdivision (a) to be published.
(c)
At the time, date, and place stated in the notice, the district board shall hear and consider all objections or protests to relieving the detached territory of annual liability for payment of principal and interest on outstanding district bonds. The hearing may be continued from time to time. Upon conclusion of the hearing, the district board shall determine by resolution, whether or not the detached territory should be relieved and absolved of any future annual tax liability for the outstanding bonds of the district.
(d)
If the district board determines that the detached territory should be relieved of annual tax liability, it shall cause a copy of its resolution to be filed pursuant to Section 54902 with the Board of Equalization and the county assessor of the county in which the territory is located. The detached territory shall be relieved and absolved of the annual tax liability for outstanding district bonds imposed by the local agency formation commission in the year next succeeding adoption of the resolution when assessments or taxes are to be levied for payment of the principal and interest on the bonds.
Nothing in this section shall be construed as in any way limiting the power of a bondholder to enforce his or her contractual rights and nothing in this section shall affect the ultimate liability of that detached territory for the bonded indebtedness of the district in case of default. This section is intended to provide a means of relieving territory detached from a district from annual assessments for the principal and interest on bonded indebtedness when that territory is no longer receiving the services for which the bonded indebtedness was incurred.