You may want to have a closer look at the regs. CA, as everyone knows, has some of the strictest emission regs of any state. Swapping engines here is simple, as long as you don't get outside the regs. To start with, the regs you quoted are, in part, almost exactly as ours. However, it only applies to fuel types or methods of propulsion (MP) originally available to a specific vehicle. Once the fuel type or MP is changed, the vehicle only has to comply IF that vehicle was not originally equipped, or available to be equipped, with that fuel type or MP. For example, you can buy a gasser, convert it to propane, and become exempt. The same applies if you convert a vehicle to electric (as long as that was not an OEM option). So, if I convert a 2001 gasser 1500 to Diesel (any Diesel), it is then exempt. This is done frequently, here.