I am pretty sure MOST setups are CARB approved (aka "smog legal").
Also, that HP range is highly inflated.
With your mods, you MAY see 1hp gain. I guess with certain setups you COULD see some higher gains, but your engine isn't begging to be fed with a lot more air.
Also, by K&N kit, do you just mean a K&N filter OR the actual new ducting? From what I remember about the K&N setups, they are TERRIBLE! They place the filter in the HOT engine bay (do a search for recent CAI posts, you will find link to article about temp differences and effects on HP). If you are going to do something about your air intake, either remove the silencer and get a nice K&N filter OR get a cheap CAI that places the filter in the fenderwell and make sure it has a nice K&N connical filter on it.