The Bay Area Water Supply and Conservation Agency has started a program called “Lawns be Gone!”    This program provides rebates to customers with specific criteria to replace lawns with drought resistant landscapes.  In order to be eligible, one must be a customer in a participating agency.  These agencies include:

Alameda County

California Water Service Company

City of San Bruno

and more.  See this link for complete listing of participating districts:

The program includes clearly stated terms and conditions that specify the type of landscape replacement to lawns is acceptable.  Additionally there is a wealth of resources for courses on drought resistant planting, mulching; as well as data on invasive plants.  This link explains the process and has details on resources for more information:

Rebates will be issued on a first come, first serve basis.  They are based on the number of square feet of turf replaced.  The program is effective through June 30, 2011