You should be fine with the California registration (and smog check) so long as the transmission has no sensors on it which are necessary for the Chevy ECU to function correctly (and NOT trigger the Check Engine Light to illuminate).
1996 and later model vehicles are equipped with a Check Engine Light, which when ON, cause a smog check failure. There are many transmission faults which trigger the check engine light ON, or at best set pending trouble codes in the ECU.
If this is the case with this particular Chevy Blue Bird bus, it will not pass the California smog inspection. We recommend asking the seller if he/she has scanned the ECU for any trouble codes, and if the check engine light on the bus is illuminated.
