As I understand the Home Energy Rating System, it does not require current efficiency levels of a 1985 home. As you pointed out, it would range from ridiculously expensive to impossible to do that. In all likelihood the inspection is going to pertain to those aspects of the system that can reasonably be made more efficient, not those that cannot.

This needs to be addressed with the company that's going to install your new system, but get second opinions and verify what you hear. In some cases unscrupulous people might use regulations as an excuse to do far more than necessary. ("We gotta rip all this out; state says so.")

I would also call the state hotline and discuss this. Make sure they understand that this is a system replacement, not a new home.

California Energy Commission Hotlines

"Duct Leakage Testing: All duct systems must meet maximum
duct leakage requirements. The maximum leakage for a new duct system is
typically 6% but varies based on when the duct leakage test is performed and
the type of building (single family, townhouse, multifamily). Duct testing for
existing duct systems have higher leakage level targets. See Residential Appendix
RA3, Table RA3.1-2."

http://www.energy.ca.gov/title24/2013standards/draft_res_compliance_forms/2013-CF1R-PRSC-ALT-03-PrescriptiveAlterationsHVAC.pdf

I haven't been able to locate Residential Appendix RA3,
Table RA3.1-2. But I suspect you will be OK as long as you don't have 30%+
leakage.

Found it. It's 10%-15% leakage, depending on how measured. If you can't pass this, I'm not sure what they will do (?)

http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Draft_Language/Staff_Proposed_Draft_Language-Appendices/2013_RA3-HERS_procedures.pdf