General emissions rules for california state that exhaust system must exit from the original place it did when you bought your car...basically, no side pipes. Also, there are noise restrictions. As for smog stuff, you'll need to keep your cat on your car and the 0x sensors.
Also, when you look at new exhaust systems, usually there is some kind of disclaimer from the manufacturer that states "not street legal" or "not approved for California". Check that out.
<span style='color:green'>1994 325i </span>- - - 75,000 mi.
No mods - - - very happy as is!
<span style='color:green'>1995 525i </span>- - - 154,000 mi.
No squeaks or rattles... unreal!