How in the world is this illegal.
Lowered frame (or any other part) that is lower than the lowest point of the wheel rim (24008 VC).
?
The "logic" behind that law is to allow the vehicle to move out of the lanes of traffic if a tire were to blow out. If the vehicle's chassis is below the lowest part of the rim, then the vehicle will effectively become a beached whale when a tire blows out.
Notice in the "airbags" section, they don't have any problems with parts of the vehicle's the chassis touching the ground as long as it is not being driven on public roads.
So, basically, go as low as you want, but be sure you don't become a beached whale when you have a flat. With some of these really low profile tires these days you can have as little as 1" or less of ground clearance

Also, it's to prevent people from putting plates under the back of their cars to throw sparks every time they hit a bump... heheh