Sorry, no secret procedure. After a week of arguing with Volvo North America (customer relations) and my local dealer they agreed to reset the codes for free (provided there was no problem with the car). Since the check engine light was not on, they agreed to try to reset the codes. Since my car is under 80,000 miles the dealer was able to do the work for free under the car's emmisions warranty (which goes up to 80,000).

The volvo tech took all day trying to drive the car around to reset it. They didn't want to use their dyno for fear of breaking the dyno with such heavy driving. The tech manages to get all the codes to reset except the evap system code. The car would have passed the smog test (with this code not ready). In CA you can have up to three codes not yet ready and it will still pass. But, when the tech turned off the car (before asking me if I wanted them to smog it) all of the codes that weren't ready at the start of the day went back to not being ready. The dealer then told me I had a problem (still undiagnosed) with my evap system and wanted to start charging me $95 an hour (minimum 2 hours) just to diagnose the problem.

After throwing a fit with the dealer and again calling Volvo, I discovered that the State of CA has smog check referee centers that you can go to if your car has problems passing. The volvos 850/v70 for '96-'98 are on a Bureau of Automotive Repair list of known cars with OBDII problems. Because of this, the smog referre was able to test the car while bypassing the OBDII test. The car passed the emissions portion of the test no problem. Problem solved and the smog referee was even free. Only drawback is that I'll have to go through the same hassle all over again 2 years from now.

I think you might have better luck dealing with State of MA officials than getting Volvo to fix this problem.