It shall be the duty of the director of the department of lands in any or all contested cases, at the direction of the board, to appoint hearing officers, receive evidence, issue subpoenas and to hold contested case hearings in accordance with sections 67-5240 through 67-5271, Idaho Code, when hearings are necessary and witnesses may be required to be examined. Provided however, that when the state board of land commissioners is exercising its duties and authorities concerning the direction, control or disposition of the public lands of the state pursuant to sections 7 and 8, article IX, of the constitution of the state of Idaho, such actions shall not be considered to be contested cases as defined in section 67-5201, Idaho Code, and section 67-5240, Idaho Code, unless the board, in its discretion, determines that a contested case hearing would be of assistance to the board in the exercise of its duties and authorities.