(a) The Department shall, in consultation with the Administration, adopt regulations to exempt motor vehicles from the program.
(b) Exemptions established under subsection (a) of this section shall be limited to:
(1) Motor vehicles sold for registration out of the State;
(2) Motor vehicles sold from a licensed dealer to another licensed dealer; and
(3) Motor vehicles that would be exempted from the low emissions vehicle program established under California law.
(c) For any motor vehicle exempted under subsection (a) of this section, the Administration shall note the exemption on the title of the motor vehicle.