I think the proposal has some good points and some bad points, but it is a start.
I don't think it is appropriate to force owners to put up a beware of dogs sign, but perhaps implement a new sign that simply makes notice of a pet with an altered / unaltered check box. I know from EMS experience that there are stickers that can be placed on a window that say "In Case of Emergency Rescue Us" and it has options to fill out pet types and quantities. Maybe a sign in this manner is better suited.
The microchip requirement is a great idea. Most responsible owners have their dog chipped anyhow, so it really doesn't increase the cost and it is a one time fee. The age limit simply needs to be amended to take into consideration large breeds.
The more controversial issue is the yearly fee for unaltered pets. I agree with this fee and my main reason is enforcement. If used properly this law will give animal enforcement agencies teeth to go after back yard breeders and irresponsible pet owners. Imagine the pressure that could be placed on backyard breeders with dozens of unaltered dogs being bred every few months. The down side is that responsible owners of unaltered pets will also pay the price, but is fifty dollars a year all that much when compared to the cost of owning and showing dogs anyhow? I think the trade off of being able to fine bad owners is much greater.
As it is written now, I don't think it should pass. With a couple changes I think this could be a very good law.