I think the concept is…

I think the concept is reasonable and could be effective. Most importantly it keeps delinquent hunters out of the investigations queue for COs.
In respect to the dollar amount of the penalty I believe the range suggested is far too low. Currently the set fine for hunters failing to make a report is $300.00 so a $35.00 penalty is hardly a graduated approach to compliance promotion. I think half the set fine would send the message but still be seen as "a break", after all the person has committed an offence.
Also, I think that failure to submit a report (of a single type) twice should make the hunter ineligible to purchase any tag related licence, not just the licence type in question - either hunter reports are important or they are not. If we are going to require hunter reporting lets send a strong message that they are important.
So, the concept is good, but the deterrence is weak.