Google California SB100 process and search this website for California SB100. Read everything. Lots of information is available and important to know.
Short version. The law says you get to pick either the year of the engine, the year of the body style OR, if the body style is not a replica of an automobile that has been manufactured and sold by a auto manufacture (Ford, GM, Toyota, etc.) then you get to select 1960 as the year for smog purposes. A kit car like the SLC is not a manufactured car and that is what this law is for. You will pick that choice and therefore it can have any engine you want in it.
However: the Smog ref will use 1966 and you will need to install a PCV valve for the 1-time inspection and smog test. After that, you will not need to get the car inspected again as long as you are the owner.
Where do you live in California? have a look at Club Cobra and find a DMV that is familiar with the SB100 process. If you are in the SF bay area then I know that the Pleasanton DMV is a good choice and they know what to do.
Start a file now and collect every part receipt you get while you build the car. Make sure you get a bill of sale for the engine, transaxle, and kit. Preferably with the serial number clearly stated on the receipt. Since it is a "kit" they will assume that the majority of the parts came with the kit. In the end, you will provide these receipts to the smog ref, DMV and highway patrol to prove that the parts were not stolen as well as to establish a cost basis for the car build.
The total of the parts receipts that you present as a package will determine the total value of the car for tax purposes. Anything that has already had sales taxes paid will not be charged twice. This is why it is important to keep receipts.
A last bit of advice. The state of California knows how much it generally takes to build an SLC. They have a database for that. Don't try and lowball them but select your receipts to reflect the fare amount you spent.
When I did mine the car was still in the jelcoat stage. I did not spend any money on paint. The jelcoat came with the "kit"...... get it. Also the intent of SB100 is to give HOMEBULILDRS a legal way to register their cars, They expect you to do the labor and don't expect to see large labor charges in your receipt package......get it.
I provided a spreadsheet for the package of parts reciepts. to make it easy on the DMV etc. Something like this: Remember this was 10+ years ago.
Complete SLC Kit 44,000
engine 6108
Transmission and drive line parts 13,062
Additional Elec parts 721
Tire and wheels 1508
Addition hardware and materials 662
Total 66061
California sales Taxes paid 331
You will need a brake and light test, start looking for a vendor that can work with you on that. The big oil change places will not have a clue what to do with your car. Again, Club Cobra can help on this as well.
If you need to talk to someone drop me a PM.