Yes. And as I understand it (and I don't live in California, so am basing it on what others have said), you can still register a kit car the "old way" which bases smog requirements on the year of engine. You still have to get a smog test (every 2 years, I think), whereas once you get an SB100 exemption, you never have to again.
Seems like you build it with a '65 289 (probably still need a closed crankcase/PCV valve for this, no Webers) and register it so you can drive it, then if they allow it, work on getting an SB100 exemption for it at which point you can sell the 289 to Dave Harris and upgrade your engine /ubbthreads/images/graemlins/smile.gif