Unless the fee for the term or any portion of the term of a lease of land for grazing livestock is determined pursuant to NRS 322.060:

1. The fee for the term or any portion of the term of the lease must be based on the fair market value of the interest leased, but must not be less than:

(a) The minimum grazing fee determined pursuant to subsection 2; or

(b) The base value specified in subsection 3,

whichever is greater, for each animal unit month leased.

2. To determine the minimum grazing fee for the purposes of subsection 1, the Administrator of the Division of State Lands of the State Department of Conservation and Natural Resources, as ex officio State Land Registrar, shall:

(a) For each of the 3 years immediately preceding the year in which the land is leased:

(1) Divide the price of beef cattle as set forth in the beef price index for that year by the cost to produce livestock as set forth in the production price index for that year; and

(2) Multiply the quotient calculated pursuant to subparagraph (1) by the base value specified in subsection 3 for that year; and

(b) Upon determining an amount for each year pursuant to paragraph (a), add each of those amounts and divide the sum by 3.

3. For the purposes of this section, the base value is $1.94 for the period beginning on July 1, 1997, and ending on December 31, 2003. On January 1, 2004, and every 6 years thereafter, the Administrator shall revise the base value to adjust for inflation.

4. As used in this section:

(a) “Animal unit month” means the amount of forage required to sustain one cow for one month.

(b) “Beef price index” means the index that:

(1) Indicates the price of beef cattle in this State; and

(2) Is calculated by the Administrator from data published annually by the United States Department of Agriculture.

(c) “Production price index” means the index that:

(1) Indicates the cost to produce livestock, including the costs related to interest, taxes and wages; and

(2) Is published annually by the United States Department of Agriculture.

(Added to NRS by 1997, 3394)