The Domestic Animals (Breeding) Legislation Amendment Bill aims to stop breeding operations that exploit dogs and cats bred for profit.

It passed unanimously and follows ACT laws enacted in October 2013 which established fines of as much as $11,000 for breaches of a code of practice.

Territory and Municipal Services Minister Shane Rattenbury said the legislation would prevent cruel and inhumane breeding practices.

It is the second element of animal protections included in the governance agreement he signed with Labor to form government after the 2012 election.

"Female dogs and cats in intensive breeding operations can have a very poor quality of life. They are often kept in inadequate conditions and treated purely as industrial breeding machines," he said.

"Females may be kept almost permanently pregnant, placing enormous stress on their bodies and then simply destroyed or abandoned when they become too old to produce commercially-viable sized litters.

"As a result of the poor conditions in which they are bred, offspring are likely to suffer congenital defects, a weakened immune system, and as a result, a shorter lifespan. They may also develop ongoing behavioural issues from a lack of trust in their keepers."

The legislation criminalises the intensive breeding of female dogs and cats with penalties of up to $15,000 for an individual and $75,000 for a corporation.

Mr Rattenbury said new offences included recklessly allowing a dog or cat to breed contrary to declared standards.

The legislation also establishes a licensing scheme for breeders to ensure animal welfare standards are maintained via site inspections.

Licensees will have to display their breeding licence number in advertisements for animals they have bred.

"This legislation will ensure the ACT has high standards for pet breeding and improve health and welfare outcomes for both female cats and dogs and their offspring," Mr Rattenbury said.