A federal judge ruled against a challenge to a North Dakota law restricting farm ownership by corporations or limited liability companies, but ordered the state to expand a family farming exemption to operations from other states. In the order, U.S. District Court Judge Daniel Hovland ruled the family farming exemption added in 1981 to the depression-era Corporate Farming Law that allowed family farms to incorporate “was intended to help preserve family farms by allowing the use of favorable tax structures” and take advantage of other benefits that could come with incorporation. However, he said the legislative history “does not reveal an intent to discriminate against out-of-state interests.” The ruling, however, did uphold other parts of the law, such as the degree of kinship required for a family farm being limited to first cousins. Plaintiffs argued that the law’s language prohibited a pair of first cousins farming within the law to pass the operation to the next generation. The North Dakota Farm Bureau, which brought the case along with a handful of other interested entities, has not commented on whether or not it plans to appeal the ruling.
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