Industrial Development Bond Limitation Act of 1983

Industrial Development Bond Limitation Act of 1983 - Amends the Internal Revenue Code to decrease the cost recovery deductions for property financed with tax-exempt (interest excluded from gross income) industrial development bonds by increasing the number of years over which the taxpayer may recover the costs of the property. Extends the recovery period for 15-year real property to 25 years. Provides an exception for any recovery property which is placed in service in connection with projects for residential rental property financed by the proceeds of tax-exempt industrial development bonds.

Denies the tax exemption to certain bonds if a significant portion of the proceeds of the issue are to be invested in deposits or accounts in a federally-insured financial institution. Exempts from this rule: (1) proceeds of the issue invested for an initial temporary period until such proceeds are needed; (2) investments related to debt service; or (3) investments of a reserve which meet the requirements of the arbitrage bond rules.

Provides that the exemption for small issue industrial development bonds will not apply if the principal uses of any facility being financed with such issue is a large business (capital expenditures of over $20,000,000 during a three year period). Prohibits the financing of land with small issue industrial development bonds.