10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

[ X ]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 29, 2014

OR

[]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from  to ____________

Commission File Number: 0-19217

American Tax Credit Properties III L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware	13-3545006
(State or Other Jurisdiction of  Organization)	(I.R.S. Employer Incorporation or Identification No.)

Richman Tax Credit Properties III L.P.
340 Pemberwick Road
Greenwich, Connecticut	06831
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code:  (203) 869-0900

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.  Yes   X    No

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  Yes    X      No   

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer Accelerated Filer Non-Accelerated Filer  Smaller Reporting Company  X 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No    X  

As of November 3, 2014, there are 35,883 units of limited partnership interest outstanding.

AMERICAN TAX CREDIT PROPERTIES III L.P.

PART I - FINANCIAL INFORMATION

Table of Contents
		Page
Item 1.	Financial Statements.
Balance Sheets		3
Statements of Operations and Comprehensive Income (Loss)		4
Statements of Cash Flows		5
Notes to Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	9
Item 3.	Quantitative and Qualitative Disclosure About Market Risk.	12
Item 4.	Controls and Procedures.	12

2

AMERICAN TAX CREDIT PROPERTIES III L.P.

BALANCE SHEETS

(UNAUDITED)

	September 29,			March 30,
	2014			2014
ASSETS
Cash and liquid investments
Cash and cash equivalents	$	6,797		$	115,513
Investment in Pemberwick Fund, a short duration bond fund		507,096			472,181
Total cash and liquid investments		513,893			587,694
Due from local partnerships					52,000
	$	513,893		$	639,694
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$	20,625		$	34,728
Payable to general partner and affiliates		3,376,872			3,317,783
		3,397,497			3,352,511
Commitments and contingencies
Partners' equity (deficit)
General partner		(2,776,919	)		(2,713,640	)
Limited partners (35,883 units of limited partnership interest outstanding)		(107,589	)		--
Accumulated other comprehensive income		904			823
		(2,883,604	)		(2,712,817	)
	$	513,893		$	639,694

See Notes to Financial Statements.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 29, 2014 AND 2013

(UNAUDITED)

	Three Months Ended September 29,			Six Months Ended September 29,			Three Months Ended September 29,			Six Months Ended September 29,
	2014			2014			2013			2013
REVENUE
Interest	$	1,630		$	2,841		$	2,164		$	4,412
Other income from local partnerships					32,330			25,000			29,830
TOTAL REVENUE		1,630			35,171			27,164			34,242
EXPENSES
Administration fees		15,717			31,791			33,155			64,722
Management fees		15,717			31,791			33,156			64,723
Professional fees		11,832			25,294			13,267			25,777
Printing, postage and other		7,955			8,487			4,851			5,709
TOTAL EXPENSES		51,221			97,363			84,429			160,931
LOSS PRIOR TO GAIN ON SALE OF LIMITED PARTNER INTERESTS/ LOCAL PARTNERSHIP PROPERTIES		(49,591	)		(62,192	)		(57,265	)		(126,689	)
GAIN ON SALE OF LIMITED PARTNER INTERESTS/LOCAL PARTNERSHIP PROPERTIES											49,810
NET LOSS		(49,591	)		(62,192	)		(57,265	)		(76,879	)
Other comprehensive income (loss) - investment in Pemberwick Fund		(857	)		81			752			(3,745	)
COMPREHENSIVE LOSS	$	(50,448	)	$	(62,111	)	$	(56,513	)	$	(80,624	)
NET LOSS ATTRIBUTABLE TO
General partner	$	(49,591	)	$	(62,192	)	$	(57,265	)	$	(76,879	)
Limited partners		--			--			--			--
	$	(49,591	)	$	(62,192	)	$	(57,265	)	$	(76,879	)
NET LOSS per unit of limited partnership interest (35,883 units of limited partnership interest)	$	--		$	--		$	--		$	--

See Notes to Financial Statements.

4

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED SEPTEMBER 29, 2014 AND 2013

(UNAUDITED)

	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received	$	2,486		$	4,412
Cash paid for
Administration fees		(4,493	)		(4,486	)
Professional fees		(37,843	)		(59,924	)
Printing, postage and other expenses		(10,041	)		(9,419	)
Net cash used in operating activities		(49,891	)		(69,417	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds in connection with sale of limited partner interests/local partnership properties					49,810
Investments in Pemberwick Fund		(127,479	)		(4,319	)
Redemptions from Pemberwick Fund		93,000
Distributions received from local partnerships		84,330			29,830
Net cash provided by investing activities		49,851			75,321
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners		(108,676	)
Net cash used in financing activities		(108,676	)
Net increase (decrease) in cash and cash equivalents		(108,716	)		5,904
Cash and cash equivalents at beginning of period		115,513			105,179
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	6,797		$	111,083
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES
Unrealized gain (loss) on investment in Pemberwick Fund	$	81		$	(3,745	)

See reconciliation of net loss to net cash used in operating activities on page 6.

See Notes to Financial Statements.

5

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS - CONTINUED

SIX MONTHS ENDED SEPTEMBER 29, 2014 AND 2013

(UNAUDITED)

	2014			2013
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss	$	(62,192	)	$	(76,879	)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on sale of limited partner interests/local partnership properties					(49,810	)
Gain on redemptions from Pemberwick Fund		(355	)
Other income from local partnerships		(32,330	)		(29,830	)
Decrease in accounts payable and accrued expenses		(14,103	)		(37,857	)
Increase in payable to general partner and affiliates		59,089			124,959
NET CASH USED IN OPERATING ACTIVITIES	$	(49,891	)	$	(69,417	)

See Notes to Financial Statements.

6

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 29, 2014

(UNAUDITED)

1. Basis of Presentation

The accompanying unaudited financial statements of American Tax Credit Properties III L.P. (the “Partnership”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. They do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of the general partner of the Partnership (the “General Partner”), the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of September 29, 2014 and the results of operations and cash flows for the interim periods presented. All adjustments are of a normal recurring nature. The results of operations for the six months ended September 29, 2014 are not necessarily indicative of the results that may be expected for the entire year.

2. Investment in Local Partnerships

The Partnership initially acquired limited partner equity interests (the “Local Partnership Interests”) in forty-three partnerships (the “Local Partnerships”) representing capital contributions in the aggregate amount of $29,384,966, which includes voluntary advances (the “Advances”) made to a certain Local Partnership and all of which has been paid. As of September 29, 2014, the Partnership holds a Local Partnership Interest in thirteen Local Partnerships (see discussion below regarding the sales of the Properties owned by Sugar Cane Villas, Ltd. (“Sugar Cane Villas”) and Queen Lane Investors (“Queen Lane”) and agreements entered into by the Partnership in connection with the anticipated sale of three Local Partnership Interests). The Partnership has no legal obligation to fund any operating deficits of the Local Partnerships. The results of operations of the Local Partnerships are provided by the general partners of the Local Partnerships (the “Local General Partners”) on an unaudited basis during interim periods.

In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to the Partnership is recognized to the extent of the Partnership’s investment balance in each Local Partnership. Equity in loss in excess of the Partnership’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership. As a result of cumulative equity losses and distributions, and the sales of certain Properties owned by the Local Partnerships and/or the Partnership’s Local Partnership Interests, the Partnership’s investment in local partnerships reached a zero balance during the year ended March 30, 2011.

During the six months ended September 29, 2014, the Partnership sold its Local Partnership Interests in Union Valley Associates Limited Partnership and Waynesboro Apartments Limited Partnership to an affiliate of the Local General Partners of such Local Partnerships. Although the Partnership received no proceeds in connection with the sale, the Partnership received $20,000 for distributions that were due to the Partnership under the terms of the partnership agreements of such Local Partnerships. Such amount is included in other income from local partnerships in the accompanying unaudited statement of operations and comprehensive income (loss) for the six months ended September 29, 2014. Such Local Partnerships have a common Local General Partner.

During the six months ended September 29, 2014, the Property owned by Sugar Cane Villas was sold at a public sale; the Partnership received no proceeds in connection with the sale. The Local General Partner of Sugar Cane Villas reports that the mortgage lender, which also provided project based rental assistance to Sugar Cane Villas under the terms of a contract subject to annual renewals, did not renew the rental assistance upon expiration of the current contract, without which Sugar Cane Villas was unable to make the mandatory debt service payments required under the terms of its mortgages. Such non-renewal is permitted under the terms of the contract. As a result, the lender commenced a foreclosure action and the applicable jurisdiction issued a Final Judgment of Foreclosure.  The Local General Partner of Sugar Cane Villas intends to dissolve Sugar Cane Villas as soon as possible.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

SEPTEMBER 29, 2014

(UNAUDITED)

2. Investment in Local Partnerships (Continued)

During the year ended March 30, 2014, Queen Lane sold its underlying Property to its first mortgage lender under the terms of an Option to Purchase and Right of First Offer; the Partnership received no proceeds in connection with the sale. The 99% Local Partnership Interest in Queen Lane was acquired along with American Tax Credit Properties II L.P. (“ATCP II”), an investment partnership whose general partner is an affiliate of the General Partner, whereby the Partnership owns 48.5%. The Local General Partner of Queen Lane intends to dissolve Queen Lane as soon as possible.

During the six months ended September 29, 2014, the Partnership entered into purchase agreements to sell its Local Partnership Interests in Batesville Family, L.P., Lawrence Road Properties, Ltd. and Purvis Heights Properties, L.P. to an affiliate of the Local General Partner of such Local Partnerships for a total of $30,660; such amount will be recorded as gain on sale of limited partner interests/local partnership properties. In addition, the Partnership will receive $7,763 for distributions that are due to the Partnership under the terms of the partnership agreements of such Local Partnerships; such amount will be recorded as other income from local partnerships. The sales are expected to close on or before December 30, 2014, subject to extension under the terms of the respective purchase agreements. Such Local Partnerships have the same Local General Partner. The 99% Local Partnership Interests in such Local Partnerships were acquired along with ATCP II (see discussion above regarding Queen Lane), whereby the Partnership owns 61.75%. ATCP II is selling its interest in such Local Partnerships as part of the same transactions.

3. Investment in Pemberwick Fund

The Partnership carries its investment in Pemberwick Fund, a short duration bond fund (“Pemberwick”) at estimated fair value. The fair value of the Partnership’s investment in Pemberwick is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements as defined in Accounting Standards Codification (“ASC”) Topic 820. Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access. Pemberwick’s net asset value (“NAV”) is $10.08 per share as of September 29, 2014. An unrealized gain of $904 is reflected as accumulated other comprehensive income in the accompanying unaudited balance sheet as of September 29, 2014. As of September 29, 2014, the Partnership has earned $40,301 of interest revenue from its investment in Pemberwick.

4. Distributions to Partners

During the six months ended September 29, 2014, the Partnership made a distribution of $3.00 per unit of limited partnership interest to unit holders of record as of June 27, 2014; such amount includes nonresident state withholding taxes of $30,994 paid on behalf of certain of the limited partners (the “Limited Partners”) in connection with gains recognized by a Local Partnership for the year ended December 31, 2013. The total distribution to the Limited Partners was $107,589; the distribution to the General Partner was $1,087.

5. Additional Information

Additional information, including the audited March 30, 2014 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 30, 2014 on file with the Securities and Exchange Commission.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 2.                 Management's Discussion and Analysis of Financial Condition and Results of Operations.

Material Changes in Financial Condition

As of September 29, 2014, American Tax Credit Properties III L.P. (the “Registrant”) has experienced a significant change in financial condition as compared to March 30, 2014 resulting primarily from distributions made to the partners (see discussion below). Principal changes in assets are comprised of periodic transactions and adjustments. Registrant owns a limited partner equity interest (the “Local Partnership Interests”) in partnerships (the “Local Partnerships”), which own low-income multifamily residential complexes (the “Properties”) that qualified for the low-income housing tax credit (the “Low-income Housing Tax Credit”) in accordance with Section 42 of the Internal Revenue Code. During the six months ended September 29, 2014, Registrant received cash from interest revenue, redemptions from Pemberwick Fund, a short duration bond fund (“Pemberwick”) and distributions from Local Partnerships and utilized cash for operating expenses, investments in Pemberwick and distributions to the partners (see discussion below). Cash and cash equivalents and investment in Pemberwick decreased, in the aggregate, by approximately $74,000 during the six months ended September 29, 2014. Payable to general partner and affiliates in the accompanying unaudited balance sheet as of September 29, 2014 represents deferred management and administration fees.

During the six months ended September 29, 2014, Registrant made a distribution of $3.00 per unit of limited partnership interest to unit holders of record as of June 27, 2014; such amount includes nonresident state withholding taxes of $30,994 paid on behalf of certain of the limited partners (the “Limited Partners”) in connection with gains recognized by a Local Partnership for the year ended December 31, 2013. The total distribution to the Limited Partners was $107,589; the distribution to the General Partner was $1,087.

Results of Operations

Registrant’s operating results are dependent, in part, upon the operating results of the Local Partnerships and are impacted by the Local Partnerships’ policies. In addition, the operating results herein are not necessarily the same for tax reporting. Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting. Accordingly, the investment is carried at cost and is adjusted for Registrant’s share of each Local Partnership’s results of operations and by cash distributions received. In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to Registrant is recognized to the extent of Registrant’s investment balance in each Local Partnership. Equity in loss in excess of Registrant’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership. As a result of cumulative equity losses and distributions, and the sales of certain Properties and/or Registrant’s Local Partnership Interests, Registrant’s investment in local partnerships reached a zero balance during the year ended March 30, 2011.

Cumulative losses and cash distributions in excess of investment in local partnerships may result from a variety of circumstances, including a Local Partnership's accounting policies, subsidy structure, debt structure and operating deficits, among other things. Accordingly, cumulative losses and cash distributions in excess of the investment are not necessarily indicative of adverse operating results of a Local Partnership.

Registrant’s operations for the three months ended September 29, 2014 and 2013 resulted in net losses of $49,591 and $57,265, respectively. Although there was not a significant change in net loss from fiscal 2013 to fiscal 2014, other income from local partnerships decreased by $25,000 and administration fees and management fees decreased, in the aggregate, by approximately $35,000. Other comprehensive loss for the three months ended September 29, 2014 resulted from an unrealized loss on investment in Pemberwick of $857.

9

AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 2.                 Management's Discussion and Analysis of Financial Condition and Results of Operations(Continued).

Registrant’s operations for the six months ended September 29, 2014 and 2013 resulted in net losses of $62,192 and $76,879, respectively. Although there was not a significant change in net loss from fiscal 2013 to fiscal 2014, gain on sale of limited partner interests/local partnership properties decreased by approximately $50,000 and administration fees and management fees decreased, in the aggregate, by approximately $66,000. Other comprehensive income for the six months ended September 29, 2014 resulted from an unrealized gain on investment in Pemberwick of $81.

Local Partnership Matters

Registrant's primary objective, to provide Low-income Housing Tax Credits to the Limited Partners, has been completed. The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Housing Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”). The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2003. The required holding period of each Property, in order to avoid Low-income Housing Tax Credit recapture, is fifteen years from the year in which the Low-income Housing Tax Credits commence on the last building of the Property (the "Compliance Period"). The Compliance Period of all of the Local Partnerships had expired as of December 31, 2007. In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”). Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties. Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted. Registrant is in the process of disposing of its remaining Local Partnership Interests. As of November 3, 2014, Registrant owns thirteen of the forty-three Local Partnership Interests initially acquired (see discussion below regarding the sales of the Properties owned by Sugar Cane Villas, Ltd. (“Sugar Cane Villas”) and Queen Lane Investors (“Queen Lane”) and agreements entered into by Registrant in connection with the anticipated sale of three Local Partnership Interests). In a prior year, Registrant served a demand on the general partners of the then remaining Local Partnerships (the “Local General Partners”) to commence a sale process to dispose of the Properties. In the event a sale cannot be consummated, it is the General Partner’s intention to sell or assign Registrant’s remaining Local Partnership Interests. It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments. Registrant intends to dissolve after the final disposition of its remaining Local Partnership Interests; there can be no assurance as to when Registrant will dispose of its remaining Local Partnership Interests.

The remaining Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States. Many of the Local Partnerships receive rental subsidy payments under the terms of agreements that expire at various times. Registrant cannot predict legislative initiatives and governmental budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs. Such changes could adversely affect the future net operating income (“NOI”) before debt service and debt structure of any or all Local Partnerships currently receiving such subsidies.

The Local Partnerships have various financing structures which include (i) required debt service payments ("Mandatory Debt Service") and (ii) debt service payments which are payable only from available cash flow subject to the terms and conditions of the notes, which may be subject to specific laws, regulations and agreements with appropriate federal and state agencies ("Non-Mandatory Debt Service or Interest"). Registrant has no legal obligation to fund any operating deficits of the Local Partnerships.

10

AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 2.                 Management's Discussion and Analysis of Financial Condition and Results of Operations(Continued).

During the six months ended September 29, 2014, Registrant sold its Local Partnership Interests in Union Valley Associates Limited Partnership and Waynesboro Apartments Limited Partnership to an affiliate of the Local General Partners of such Local Partnerships. Although Registrant received no proceeds in connection with the sale, Registrant received $20,000 for distributions that were due Registrant under the terms of the partnership agreements of such Local Partnerships. Such amount is included in other income from local partnerships in the accompanying unaudited statement of operations and comprehensive income (loss) for the six months ended September 29, 2014. Such Local Partnerships have a common Local General Partner.

During the six months ended September 29, 2014, the Property owned by Sugar Cane Villas was sold at a public sale; Registrant received no proceeds in connection with the sale. The Local General Partner of Sugar Cane Villas reports that the mortgage lender, which also provided project based rental assistance to Sugar Cane Villas under the terms of a contract subject to annual renewals, did not renew the rental assistance upon expiration of the current contract, without which Sugar Cane Villas was unable to make the mandatory debt service payments required under the terms of its mortgages. Such non-renewal is permitted under the terms of the contract. As a result, the lender commenced a foreclosure action and the applicable jurisdiction issued a Final Judgment of Foreclosure.  The Local General Partner of Sugar Cane Villas intends to dissolve Sugar Cane Villas as soon as possible.

During the year ended March 30, 2014, Queen Lane sold its underlying Property to its first mortgage lender under the terms of an Option to Purchase and Right of First Offer; Registrant received no proceeds in connection with the sale. The 99% Local Partnership Interest in Queen Lane was acquired along with American Tax Credit Properties II L.P. (“ATCP II”), an investment partnership whose general partner is an affiliate of the General Partner, whereby Registrant owns 48.5%. The Local General Partner of Queen Lane intends to dissolve Queen Lane as soon as possible.

During the six months ended September 29, 2014, Registrant entered into purchase agreements to sell its Local Partnership Interests in Batesville Family, L.P., Lawrence Road Properties, Ltd. and Purvis Heights Properties, L.P. to an affiliate of the Local General Partner of such Local Partnerships for a total of $30,660; such amount will be recorded as gain on sale of limited partner interests/local partnership properties. In addition, Registrant will receive $7,763 for distributions that are due to Registrant under the terms of the partnership agreements of such Local Partnerships; such amount will be recorded as other income from local partnerships. The sales are expected to close on or before December 30, 2014, subject to extension under the terms of the respective purchase agreements. Such Local Partnerships have the same Local General Partner. The 99% Local Partnership Interests in such Local Partnerships were acquired along with ATCP II (see discussion above regarding Queen Lane), whereby Registrant owns 61.75%. ATCP II is selling its interest in such Local Partnerships as part of the same transactions.

Critical Accounting Policies and Estimates

The accompanying unaudited financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires Registrant to make certain estimates and assumptions. The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Registrant’s financial condition and results of operations. Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the accompanying unaudited financial statements.

· Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 2.                 Management's Discussion and Analysis of Financial Condition and Results of Operations(Continued).

· Registrant does not consolidate the accounts and activities of the Local Partnerships, which are considered Variable Interest Entities as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810; Subtopic 10 because Registrant is not considered the primary beneficiary. Registrant’s balance in investment in local partnerships represents the maximum exposure to loss in connection with such investments. Registrant’s exposure to loss on the Local Partnerships is mitigated by the condition and financial performance of the underlying Properties as well as the financial strength of the Local General Partners. In addition, the partnership agreements of the Local Partnerships grant the Local General Partners the power to direct the activities that most significantly impact the economic success of the Local Partnerships. As a result of cumulative equity losses and distributions, and the sales of certain Properties and/or Registrant’s Local Partnership Interests, Registrant’s investment in local partnerships reached a zero balance during the year ended March 30, 2011.

Forward-Looking Information

As a cautionary note, with the exception of historical facts, the matters discussed in this quarterly report on Form 10-Q are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements may relate to, among other things, current expectations, forecasts of future events, future actions, future performance generally, business development activities, capital expenditures, strategies, the outcome of contingencies, future financial results, financing sources and availability and the effects of regulation and competition. Words such as “anticipate,” “expect,” “intend,” “plan,” “seek,” “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements. Registrant may also provide written forward-looking statements in other materials released to the public. Such statements are made in good faith by Registrant pursuant to the “Safe Harbor” provisions of the Reform Act. Registrant undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Such forward-looking statements involve known risks, uncertainties and other factors that may cause Registrant’s actual results of operations or actions to be materially different from future results of operations or actions expressed or implied by the forward-looking statements.

Item 3.                 Quantitative and Qualitative Disclosure About Market Risk.

Registrant is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.

Item 4.                 Controls and Procedures.

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed by Registrant in reports that Registrant files or submits under the Exchange Act is recorded, processed, summarized and timely reported as provided in SEC rules and forms. Registrant periodically reviews the design and effectiveness of its disclosure controls and procedures, including compliance with various laws and regulations that apply to its operations. Registrant makes modifications to improve the design and effectiveness of its disclosure controls and procedures, and may take other corrective action, if its reviews identify a need for such modifications or actions. In designing and evaluating the disclosure controls and procedures, Registrant recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 4.                 Controls and Procedures (Continued).

Registrant has carried out an evaluation, under the supervision and the participation of its management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the three months ended September 29, 2014. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner concluded that Registrant’s disclosure controls and procedures were effective as of September 29, 2014.

There were no changes in Registrant’s internal control over financial reporting during the three months ended September 29, 2014 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

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AMERICAN TAX CREDIT PROPERTIES III L.P.

Part II - OTHER INFORMATION

Item 1.	Legal Proceedings.
	None.
Item 1A.	Risk Factors.
	Registrant has entered into agreements to sell three of the thirteen Local Partnership Interests owned as of June 27, 2014 and another Local Partnership has sold its underlying Property. There have been no other material changes from the risk factors previously disclosed in Item 1A of Registrant’s Annual Report on Form 10-K for the year ended March 30, 2014.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.
	None.
Item 3.	Defaults Upon Senior Securities.
	None.
Item 4.	Mine Safety Disclosures.
	Not applicable.
Item 5.	Other Information.
	None.
Item 6.	Exhibits.
	Exhibit 31.1	Rule 13a-14(a)/15d-14(a)Certification of Chief Executive Officer.
	Exhibit 31.2	Rule 13a-14(a)/15d-14(a)Certification of Chief Financial Officer.
	Exhibit 32.1	Section 1350 Certification of Chief Executive Officer.
	Exhibit 32.2	Section 1350 Certification of Chief Financial Officer.
	Exhibit 101.ins	XBRL Instance.*
	Exhibit 101.xsd	XBRL Schema.*
	Exhibit 101.cal	XBRL Calculation.*
	Exhibit 101.def	XBRL Definition.*
	Exhibit 101.lab	XBRL Label.*
	Exhibit 101.pre	XBRL Presentation.*

*Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

14

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICAN TAX CREDIT PROPERTIES III L.P.
	(a Delaware limited partnership)
	By: Richman Tax Credit Properties III L.P.,
	General Partner
	By: Richman Housing Credits Inc.,
	general partner
Dated: November 3, 2014	/s/David Salzman
	By: David Salzman
	Chief Executive Officer
Dated: November 3, 2014	/s/James Hussey
	By: James Hussey
	Chief Financial Officer
Dated: November 3, 2014	/s/Richard Paul Richman
	By: Richard Paul Richman
	Sole Director

15

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David Salzman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Tax Credit Properties III L.P. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2014	/s/David Salzman
	David Salzman
	Chief Executive Officer of Richman Housing Credits Inc., general partner of Richman Tax Credit Properties III L.P., general partner of the registrant

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, James Hussey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Tax Credit Properties III L.P. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2014	/s/James Hussey
	James Hussey
	Chief Financial Officer of Richman Housing Credits Inc., general partner of Richman Tax Credit Properties III L.P., general partner of the registrant

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Tax Credit Properties III L.P. (the “Registrant”) on Form 10-Q for the period ended September 29, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Salzman, Chief Executive Officer of Richman Housing Credits Inc., general partner of Richman Tax Credit Properties III L.P., general partner of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/David Salzman

David Salzman

Chief Executive Officer of Richman Housing

Credits Inc., general partner of Richman

Tax Credit Properties III L.P., general

partner of the Registrant

November 3, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Tax Credit Properties III L.P. (the “Registrant”) on Form 10-Q for the period ended September 29, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Hussey, Chief Financial Officer of Richman Housing Credits Inc., general partner of Richman Tax Credit Properties III L.P., general partner of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/James Hussey

James Hussey

Chief Financial Officer of Richman Housing

Credits Inc., general partner of Richman

Tax Credit Properties III L.P., general

partner of the Registrant

November 3, 2014

XML

1. Basis of Presentation

6 Months Ended

Sep. 29, 2014

Notes

1. Basis of Presentation

1.      Basis of Presentation

The accompanying unaudited financial statements of American Tax Credit Properties III L.P. (the “Partnership”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. They do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of the general partner of the Partnership (the “General Partner”), the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of September 29, 2014 and the results of operations and cash flows for the interim periods presented. All adjustments are of a normal recurring nature. The results of operations for the six months ended September 29, 2014 are not necessarily indicative of the results that may be expected for the entire year.

XML

BALANCE SHEETS (USD $)	Sep. 29, 2014	Mar. 30, 2014
Cash and liquid investments
Cash and cash equivalents	$ 6,797	$ 115,513
Investment in Pemberwick Fund, a short duration bond fund	507,096	472,181
Total cash and liquid investments	513,893	587,694
Due from local partnerships		52,000
Total assets	513,893	639,694
Liabilities
Accounts payable and accrued expenses	20,625	34,728
Payable to general partner and affiliates	3,376,872	3,317,783
Total liabilities	3,397,497	3,352,511
Commitments and contingencies
Partners' equity (deficit)
General partner	(2,776,919)	(2,713,640)
Limited partners (35,883 units of limited partnership interest outstanding)	(107,589)
Accumulated other comprehensive income	904	823
Total equity (deficit)	(2,883,604)	(2,712,817)
Total liabilities & equity (deficit)	$ 513,893	$ 639,694

XML

STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Sep. 29, 2014	Sep. 29, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received	$ 2,486	$ 4,412
Cash paid for administration fees	(4,493)	(4,486)
Cash paid for professional fees	(37,843)	(59,924)
Cash paid for printing, postage and other expenses	(10,041)	(9,419)
Net cash used in operating activities	(49,891)	(69,417)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds in connection with sale of limited partner interests/local partnership properties		49,810
Investments in Pemberwick Fund	(127,479)	(4,319)
Redemptions from Pemberwick Fund	93,000
Distributions received from local partnerships	84,330	29,830
Net cash provided by investing activities	49,851	75,321
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners	(108,676)
Net cash used in financing activities	(108,676)
Net increase (decrease) in cash and cash equivalents	(108,716)	5,904
Cash and cash equivalents at beginning of period	115,513	105,179
CASH AND CASH EQUIVALENTS AT END OF PERIOD	6,797	111,083
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES
Unrealized gain (loss) on investment in Pemberwick Fund	$ 81	$ (3,745)

XML

STATEMENTS OF CASH FLOWS - CONTINUED (USD $)	6 Months Ended
	Sep. 29, 2014	Sep. 29, 2013
STATEMENTS OF CASH FLOWS - CONTINUED
Net loss	$ (62,192)	$ (76,879)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on sale of limited partner interests/local partnership properties		(49,810)
Gain on redemptions from Pemberwick Fund	(355)
Other income from local partnerships	(32,330)	(29,830)
Decrease in accounts payable and accrued expenses	(14,103)	(37,857)
Increase in payable to general partner and affiliates	59,089	124,959
NET CASH USED IN OPERATING ACTIVITIES	$ (49,891)	$ (69,417)

XML

BALANCE SHEETS PARENTHETICAL	Sep. 29, 2014	Mar. 30, 2014
BALANCE SHEETS PARENTHETICAL
Units of limited partnership interest outstanding	35,883	35,883

XML

Document and Entity Information	6 Months Ended
	Sep. 29, 2014	Nov. 03, 2014
Document and Entity Information
Entity Registrant Name	AMERICAN TAX CREDIT PROPERTIES III LP
Document Type	10-Q
Document Period End Date	Sep. 29, 2014
Amendment Flag	false
Entity Central Index Key	0000856135
Current Fiscal Year End Date	--03-30
Entity Common Stock, Shares Outstanding		35,883
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Sep. 29, 2014	Sep. 29, 2013	Sep. 29, 2014	Sep. 29, 2013
REVENUE
Interest	$ 1,630	$ 2,164	$ 2,841	$ 4,412
Other income from local partnerships		25,000	32,330	29,830
TOTAL REVENUE	1,630	27,164	35,171	34,242
EXPENSES
Administration fees	15,717	33,155	31,791	64,722
Management fees	15,717	33,156	31,791	64,723
Professional fees	11,832	13,267	25,294	25,777
Printing, postage and other	7,955	4,851	8,487	5,709
TOTAL EXPENSES	51,221	84,429	97,363	160,931
LOSS PRIOR TO GAIN ON SALE OF LIMITED PARTNER INTERESTS/ LOCAL PARTNERSHIP PROPERTIES	(49,591)	(57,265)	(62,192)	(126,689)
GAIN ON SALE OF LIMITED PARTNER INTERESTS/LOCAL PARTNERSHIP PROPERTIES				49,810
NET LOSS	(49,591)	(57,265)	(62,192)	(76,879)
NET LOSS ATTRIBUTABLE TO
General partner	(49,591)	(57,265)	(62,192)	(76,879)
Limited partners
NET LOSS per unit of limited partnership interest (35,883 units of limited partnership interest)

XML

5. Additional Information

6 Months Ended

Sep. 29, 2014

Notes

5. Additional Information

5.      Additional Information

Additional information, including the audited March 30, 2014 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 30, 2014 on file with the Securities and Exchange Commission.

XML

4. Distributions To Partners

6 Months Ended

Sep. 29, 2014

Notes

4. Distributions To Partners

4.      Distributions to Partners

During the six months ended September 29, 2014, the Partnership made a distribution of $3.00 per unit of limited partnership interest to unit holders of record as of June 27, 2014; such amount includes nonresident state withholding taxes of $30,994 paid on behalf of certain of the limited partners (the “Limited Partners”) in connection with gains recognized by a Local Partnership for the year ended December 31, 2013. The total distribution to the Limited Partners was $107,589; the distribution to the General Partner was $1,087.

XML

3. Investment in Pemberwick Fund (Details) (USD $)	Sep. 29, 2014
Details
Pemberwick Net Asset Value	$ 10.08
Unrealized gain reflected as other comprehensive income	$ 904
Aggregate interest revenue from investment in Pemberwick	$ 40,301

XML

2. Investment in Local Partnerships: Capital Contributions (Details) (USD $)	Sep. 29, 2014
Details
Capital contributions in the aggregate	$ 29,384,966

XML

2. Investment in Local Partnerships (Details) (USD $)	3 Months Ended	6 Months Ended			3 Months Ended
	Sep. 29, 2013	Sep. 29, 2014	Sep. 29, 2013	Sep. 29, 2014 Union Valley Associates Limited Partnership and Waynesboro Apartments Limited Partnership	Dec. 30, 2014 Batesville Family, L.P., Lawrence Road Properties, Ltd. and Purvis Heights Properties, L.P.
Other income from local partnerships	$ 25,000	$ 32,330	$ 29,830	$ 20,000	$ 7,763
GAIN ON SALE OF LIMITED PARTNER INTERESTS/LOCAL PARTNERSHIP PROPERTIES			$ 49,810		$ 30,660

XML

4. Distributions To Partners (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 29, 2014	Sep. 29, 2014
Details
Distributions to partners	$ 30,994	$ 108,676
Distributions to limited partners	30,994	107,589
Distribution to general partner		$ 1,087

XML

STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended		6 Months Ended
	Sep. 29, 2014	Sep. 29, 2013	Sep. 29, 2014	Sep. 29, 2013
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
NET LOSS	$ (49,591)	$ (57,265)	$ (62,192)	$ (76,879)
Other comprehensive income (loss) - investment in Pemberwick Fund	(857)	752	81	(3,745)
COMPREHENSIVE LOSS	$ (50,448)	$ (56,513)	$ (62,111)	$ (80,624)

XML

3. Investment in Pemberwick Fund

6 Months Ended

Sep. 29, 2014

Notes

3. Investment in Pemberwick Fund

3.      Investment in Pemberwick Fund

The Partnership carries its investment in Pemberwick Fund, a short duration bond fund (“Pemberwick”) at estimated fair value. The fair value of the Partnership’s investment in Pemberwick is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements as defined in Accounting Standards Codification (“ASC”) Topic 820. Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access. Pemberwick’s net asset value (“NAV”) is $10.08 per share as of September 29, 2014. An unrealized gain of $904 is reflected as accumulated other comprehensive income in the accompanying unaudited balance sheet as of September 29, 2014. As of September 29, 2014, the Partnership has earned $40,301 of interest revenue from its investment in Pemberwick.