My wifes Malibu would not pass inspection due to a faulty parking brake.....it seems that the pedal is stuck and i cannot set the parking brake. I am asking where do i start with this one?

The parking brake mechanism is pretty simple. The parking brake pedal pulls on a cable that in turn pulls on two cables (at the equalizer point) each of which then actuates the brake (lever inside the drum or caliper) on the respective rear. If the pedal is rusted stuck (no movement at all), try spraying some penetrating chemicals like PB Blaster into the mechanism. Just be mindful not to get it on or inside the parking brake alarm switch (part of the pedal mechanism).

If Starship's idea doesn't pan out your next option is to check junkyards and replace the pedal assembly.

Ok, The pedal now moves but the mechanism will not realease at both calipers, i have to pry it back to get the brakes off....could this be an issue at the equilizer point if so, where would that be located? Just some FYI, the garage that inspected the vehicle told my wife that both rear calipers were bad and not releasing the parking brake.....could this really be the cause, how often do both calipers go bad? Anyhow, i now assume I need to narrow down the equilizer point to see if the issue is there. Need help trying to locate this, i followed the cables up from the calipers and noticed they become hidden about half way up and have no clue where they go from there.

Yes, it's possible that both parking calipers have suffered the same calamity at the same time. What would be the most revealing is to find out how often you use the parking brake, and when the last time was. They may have suffered from rust after a lengthy period of not moving (not being used). The parking brake system is separate from the service brakes but might use the same friction surfaces. If the parking brake (in simplified terms) just squeezes the disk calipers together then they are the same pads as the service brakes. If they use a drum system instead then they're completely separate surfaces and systems. That type could easily rust in place compared to the other system that uses the service brake mechanisms and friction surfaces. The cables can also rust or oxidize inside the housings, making them hard to move regardless of the condition of the brakes.

There's no hydraulics involved in the parking brake. The rear caliper has spring-loaded mechanism on the back that pushes the piston (like a screw or bolt in reverse action). The cable rotates the screw which then pushes the piston against the pad. When the parking brake is released, the spring rotates the screw back. Since there's no chance the cables are iced or anything like that in this weather, it sounds like this mechanism is really seized. You can't spray anything into it and thus the calipers need to be replaced.

Oh, the equalizer is where the two cables meet the cable coming from the parking brake pedal. It's like a seesaw with the two cables hooked onto the opposite ends with the pivot point being the cable from the parking brake pedal. Just follow the two cables toward the front. You say tney disappeared? Do you have the car on jackstands or ramps?

And, it's perfectly okay to drive the car. I don't know why NC state is even checking the parking brake. What do they think will happen if you pushed on the parking brake at high speed.