Alton, Iowa; Beavertown, Pa., and Decatur, Ala., no longer qualify as "distressed" cities under federal guidelines. Nor do Banning, Blythe and Barstow, Calif.

But Beverly Hills, Calif., does.

Under a new Department of Housing and Urban Development list, Beverly Hills may apply for about $56 million a year in business-development grants reserved for small cities suffering "physical and economic distress."

Federal officials called the listing a fluke and said it is highly unlikely that glamorous Beverly Hills, whose median household income of $38,000 is among the highest in California, would ever receive a grant.

A Beverly Hills spokeswoman said that although her city does have a sizable population of elderly poor, it has no plan to apply for grants as a distressed city.

Still, officials who compete for the special grants -- designed to create jobs for low-income residents -- are scratching their heads over the eligibility of Beverly Hills, a city known for its mansions, exclusive shopping and chic restaurants. Under the 9-year-old Urban Development Action Grant program, which will award about $225 million in grants to large and small cities this year, a city must meet minimum standards in three of six categories that initially are considered equally.

Beverly Hills qualified because of slow growth in population and employment and because at least 20 percent of its housing was constructed before 1940. It failed to qualify under categories that measured poverty, income increases and unemployment.

HUD spokesman Jack Flynn said, "We've got to use standardized data. It's probably the only way to be as close to fair as possible."