(a) As used in this article, the term "contiguous area" means any area of which at least one-eighth of the aggregate external boundary, at the time annexation procedures are initiated, directly abuts the municipal boundary. Any area shall also be a "contiguous area" if at least one-eighth of its aggregate external boundary would directly abut the municipal boundary if not otherwise separated, in whole or in part, from the municipal boundary by lands owned by the municipal corporation, by lands owned by a county, or by lands owned by this state or by the definite width of (1) any street or street right of way, (2) any creek or river, or (3) any right of way of a railroad or other public service corporation.

(b) For purposes of determining an area's aggregate external boundary, all real property which, at the time annexation procedures are initiated, (1) is owned by the same person who owns real property in the area to be annexed, (2) adjoins to any extent such owner's real property in the area to be annexed, (3) is in the same county as the real property in the area to be annexed, and (4) is not included within the boundaries of any municipal corporation shall have its area included in determining the aggregate external boundary of the area to be annexed.