(Reuters) - The 4th U.S. Circuit Court of Appeals on Wednesday said a Trump administration rule barring permanent U.S. residency for immigrants deemed likely to need government benefits such as housing and food assistance is reasonable, and overturned an injunction issued by a Maryland federal judge.

The court in a 2-1 decision said the Immigration and Nationality Act (INA) grants the executive branch broad discretion to decide who qualifies as a "public charge," and the term does not apply only to immigrants who are primarily dependent on government benefits as the judge had found.

The U.S. Supreme Court in February had stayed the judge's nationwide injunction, allowing the 2019 rule from U.S. Citizenship and Immigration Services (USCIS) to take effect.

The 4th Circuit ruling came one day after the 2nd Circuit said the definition of "public charge" used by USCIS was too broad and upheld an injunction by a federal judge in Manhattan.

USCIS, a part of the U.S. Department of Homeland Security, did not respond to a request for comment. Nor did Jonathan Backer of Georgetown University Law Center, who represented immigrant advocacy group CASA de Maryland in Wednesday's case.

Under the rule, USCIS may reject applications for green cards and visas by immigrants who have received government benefits such as Medicaid and food stamps for more than 12 months in any 36-month period.

Previously, permanent residency was denied for immigrants who were "primarily dependent" upon government assistance.

Casa de Maryland was one of several advocacy groups and Democrat-led states to file lawsuits challenging the rule last year. Casa, along with two immigrants subject to the rule, claimed it was arbitrary and capricious in violation of the Administrative Procedure Act and violated immigrants' due process rights.

U.S. District Judge Paul Grimm in Greenbelt, Maryland agreed and temporarily blocked enforcement of the rule in October.

The government appealed, arguing that Congress in adopting the INA intended to require immigrants to rely on their own resources rather than taxpayer-funded public benefits to meet their basic needs.

In January, more than 100 tech companies including Microsoft Corp and Twitter Inc filed an amicus brief urging the 4th Circuit to uphold the injunction. They said the rule would require employers to complete twice as much paperwork in preparing residency applications for employees and companies' legal costs could balloon by more than $450 million annually.

The 4th Circuit majority on Wednesday sided with the Trump administration, saying it was not the court's place to decide if USCIS had made the proper policy decision.

"The INA is structured to give the executive discretion to administer the public charge provision, which undermines the idea that the term has the sort of fixed and circumscribed definition," Circuit Judge J. Harvie Wilkinson wrote, joined by Circuit Judge Paul Niemeyer.

Circuit Judge Robert King in dissent said USCIS had inexplicably departed from 140 years of precedent that narrowly applied the public charge standard.

"The public charge provision was meant to exclude from the United States only those unable to care for themselves without significant government assistance, not simply those in need of some public aid," King wrote.

The case is CASA de Maryland Inc v. Trump, 4th U.S. Circuit Court of Appeals, No. 19-2222.

For the plaintiffs: Jonathan Backer of Georgetown University Law Center

For the government: Gerard Sinzdak of the U.S. Department of Justice