(1) Applicants shall be notified that the issuance of a new license or transfer will not be allowed by the department when:

(a) the number of licenses of each type already issued for the quota area is equal to or exceeds the limitations specified in 16-4-105, 16-4-201, and 16-4-420, MCA; or

(b) the transfer of an on-premises consumption alcoholic beverages license under these circumstances could not be approved under the requirements of the law.