The South Carolina Department of Transportation (SCDOT) is preparing to submit a final proposal for a Culvert Replacement In-Lieu Fee (ILF) Mitigation Program to the U.S. Army Corps of Engineers (USACE) Charleston District and the Inter-Agency Review Team. The program, which aligns with formal guidance in USACE Regulatory Guidance Letter 18-01, is designed to provide enhancement and restoration of aquatic systems through the replacement of perched or underperforming culverts. The ILF program, with support from the US. Fish and Wildlife Service, will begin with a pilot on the Catawba Watershed and eventually expand statewide, with a focus on watersheds that are not served or underserved by private mitigation banks. Initial credit release will be funded by the state, with additional credits generated as culvert replacement projects are implemented. Once the ILF program is approved, advanced credits will be available immediately to offset impacts for SCDOT projects in the USACE service area. The program will focus on older culverts that create passage issues, pose hydrological fragmentation concerns, or affect stream stability. It will apply to existing infrastructure and projects that fit under SCDOT’s existing transportation general permit (typically projects with less than 3 acres or 300 linear feet of impacts). To support the ILF, SCDOT, in collaboration with the Southeast Aquatic Resources Partnership, adopted the Stream Crossing Survey data form utilized by State and Federal agencies in South Carolina to assess Aquatic Organism Passage (AOP). The electronic form allows for rapid assessment of culverts in the field and assigns a final score to help prioritize replacement projects. Once active, the new ILF program is expected to generate significant uplift for aquatic resources and improve the resiliency of infrastructure assets in South Carolina. Once approved, this program will be the first “culvert banking” program in the nation reconnecting stream reaches, investing in aquatic and structural assets, and generating mitigation credits for future projects.