UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                            REGION IV

                      345 COURTLAND STREET
                     ATLANTA, GEORGIA 30365

MEMORANDUM

DATE:     DEC 1987

SUBJECT:  Resolving Nonattainment NSR Violations by Making Major
          Sources Minor

FROM:     Bruce P. Miller, Chief
          Air Programs Branch

TO:       Gary McCutchen, Chief
          New Source Review Section (MD-15)
          OAQPS

Recently, Region IV has had to address several questions regarding
the proper permitting procedures for violating sources in
nonattainment areas.  In order to help resolve the questions with
which we are now faced, we are requesting written confirmation of
the following positions:

     1)   In nonattainment area, is it permissible for a source
          that was permitted as a minor source (i.e., less than 100
          tons per year of the nonattainment pollutant), but
          actually operated at a level above the 100 ton per year
          threshold, to retain its minor source status?

          It is our position that a minor source can remain a minor
          source, even if it actually operated as a major source,
          provided the proper penalties are assessed for the period
          of violation.

     2)   It is permissible for a source in a nonattainment area
          which never obtained a construction permit (or which
          received an invalid minor source permit), but was built
          and operated at a level above the 100 ton per year
          threshold for some period of time, to be permitted as a
          minor source (i.e., potential emissions restricted to
          below 100 tons per year of the nonattainment pollutant)?

          If so, will the permitting of the violating source as a
          minor source negate the Lowest Achievable Emission Rate
          (LAER) and emissions offset requirements which would have
          been imposed if the source had been permitted as a major
          new source at the time of construction?



                               -2-

          It is our position that a source that constructed and
          operated (without a permit) as a major source may be
          permitted as a minor source, provided the proper
          penalties are assessed, to remove the economic benefit
          achieved by the company for operating a major source
          without controls or without a valid permit.

          It is also our position that if such a source is
          permitted as a minor source that the requirements for
          LAER and offsets would not apply.

     3)   Do these same conclusions hold true for sources in
          attainment areas?

          It is our position that they do.

Please concur with our position or advise otherwise.  You may
contact me or Wayne Aronson of my staff at FTS 257-2864 if you need
further clarification or additional information.