I hate to tell you my tale regarding this. I have an '97 850 GLT sedan that is registered in Nashville, TN and they do emissions testing by the OBD system as well.
It seems that if the battery is pulled for any reason - the computer will power down and the sensors as well. To reset the sensors and enable them to become functioning again for use in OBD testing requires a specific set of instructions. The instructions comprise a specific set of driving conditions/method, ie 20mph for 2min, 30mph for 5 min, idle for 3 minutes, ect.... Let the car cool completely and do it again.
It seems that '97 & '98 Volvos have this problem and the dealer should be aware of it. This is the only way to reset the sensors to have them functioning again. Their computer cannot "make" the sensors reset - only by the method described above.
You might want to search this board for the information.
Best of Luck
Andrew
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