American Tax Credit Properties Iii (ATCIIIX) 10-K 2008 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 30, 2008

OR

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

For the transition period from _________ to _________

0-19217

(Commission File Number)

American Tax Credit Properties III L.P.

(Exact name of registrant as specified in its governing instruments)

Delaware	13-3545006
(State or other jurisdiction of organization)	(I.R.S. Employer 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
Securities registered pursuant to Section 12(b) of the Act:
None	None
(Title of each Class)	(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

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 such filing requirement for the past 90 days. Yes x Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in a definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer oSmaller 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 o No x

Registrant has no voting stock. There is no established public trading market for Registrant’s Units. Accordingly, accurate information as to the market value of a Unit at any given date is not available. As of June 2008, there are 35,883 Units outstanding.

Documents incorporated by reference:

Part I - pages 20 through 31 and 44 through 66 of the prospectus dated February 7, 1990, as supplemented by Supplement No. 1, Supplement No. 2, Supplement No. 3, Supplement No. 4, Supplement No. 5 and Supplement No. 6 dated June 6, 1990, November 21, 1990, December 20, 1990, October 30, 1991, December 26, 1991 and January 15, 1992, respectively, filed pursuant to Rule 424(b)(3) under the Securities Act of 1933.

PART I

Item 1. Business

General Development of Business and Narrative Description of Business

American Tax Credit Properties III L.P. ("Registrant"), a Delaware limited partnership, was formed on September 21, 1989 to invest primarily in leveraged low-income multifamily residential complexes (the “Property” or “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of limited partner equity interests in partnerships (the "Local Partnership" or "Local Partnerships") that are the owners of the Properties. Registrant considers its activity to constitute a single industry segment.

Richman Tax Credit Properties III L.P. (the "General Partner"), a Delaware limited partnership, was formed on September 21, 1989 to act as the general partner of Registrant. The general partner of the General Partner is Richman Housing Credits Inc. ("Richman Housing"), a Delaware corporation that is wholly owned by Richard Paul Richman. Richman Housing is an affiliate of The Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard Paul Richman in 1988.

The Amendment No. 2 to the Registration Statement on Form S-11 was filed with the Securities and Exchange Commission (the "Commission") on February 1, 1990 pursuant to the Securities Act of 1933 under Registration Statement File No. 33-31390 and was declared effective on February 2, 1990. Reference is made to the prospectus dated February 7, 1990, as supplemented by Supplement No. 1, Supplement No. 2, Supplement No. 3, Supplement No. 4, Supplement No. 5 and Supplement No. 6 dated June 6, 1990, November 21, 1990, December 20, 1990, October 30, 1991, December 26, 1991 and January 15, 1992, respectively, filed with the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 (the "Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the description of Registrant's business set forth under the heading "Investment Objectives and Policies" at pages 44 through 66 of the Prospectus is incorporated herein by reference.

On March 12, 1990, Registrant commenced, through Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), the offering of up to 150,000 units of limited partnership interest ("Unit") at $1,000 per Unit to investors. On June 13, 1990, December 27, 1990, December 31, 1991 and January 23, 1992 the closings for 19,730, 9,622, 5,227 and 1,304 Units, respectively, took place, amounting to aggregate limited partners’ capital contributions of $35,883,000.

Financial Information About Industry Segments

Registrant is engaged solely in the business of owning a limited partner interest in each of the Local Partnerships. A presentation of information regarding industry segments is not applicable and would not be material to an understanding of Registrant’s business taken as a whole. See Item 8 below for a summary of Registrant's operations.

Compliance with Environmental Protection Provisions

Registrant is not aware of any non-compliance by the Local Partnerships with respect to federal, state and local provisions regulating the discharge of material into the environment or otherwise relating to the protection of the environment, and is not aware of any condition that would have a material effect on the capital expenditures or competitive position of Registrant.

Competition

Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations promulgated under the Exchange Act, the description of Registrant's competition, general risks, tax risks and partnership risks set forth under the heading "Risk Factors" at pages 20 through 31 of the Prospectus is incorporated herein by reference. See Item 1A below.

Employees of Registrant

Registrant employs no personnel and incurs no payroll costs. All management activities of Registrant are conducted by the General Partner. An affiliate of the General Partner employs individuals who perform the management activities of Registrant. This entity also performs similar services for other affiliates of the General Partner.

2

Item 1A. Risk Factors

Risks Relating to Registrant’s Business and Industry

Properties owned by the Local Partnerships are subject to certain risks relating to the real estate industry in general that are outside of the control of the Local Partnerships or Registrant and that may have an adverse affect on Registrant’s investment in such Local Partnerships.

Registrant’s investment in the Local Partnerships is subject to the risks associated with multi-family rental property and real estate in general, including retail, commercial and residential real estate. Such risks are subject to change and not in the control of Registrant, including:

·adverse use of adjacent or neighborhood real estate;

·regulated rents, which may adversely impact rent increases;

·utility allowances, which may adversely impact rents charged to tenants from year to year in certain locations;

·changes in the demand for or supply of competing properties;

·changes in state or local tax rates and assessments;

·increases in utility charges;

·unexpected expenditures for repairs and maintenance;

·discovery of previously undetected environmentally hazardous conditions;

·costs associated with complying with the Americans with Disabilities Act;

·uninsured losses relating to real property or excessively expensive premiums for insurance coverage;

·changes in local economic conditions; and

·changes in interest rates and the availability of financing.

The occurrence of any of the above risks could have a negative impact on the operating results of such Properties and the respective Local Partnerships and, in turn, may render the sale or refinancing of the Properties difficult or unattractive, which could adversely affect Registrant’s investment in such Local Partnerships.

The modification or elimination of government rental subsidies on which the Local Partnerships rely would require the Local Partnerships to use existing funds or obtain additional funds to continue to operate the respective Properties. Because Registrant’s investments in the Local Partnerships are highly leveraged, it would be highly difficult to obtain such additional funds.

Virtually all of the Properties owned by the Local Partnerships have some form of a government funded rental subsidy, which affords the low-income tenants the ability to reside at the Properties. The Local Partnerships are extremely reliant on such subsidies. If the respective rental subsidy programs were to be materially modified or eliminated, the Local Partnerships’ rental revenue would likely be significantly reduced. To the extent that revenues are not sufficient to meet operating expenses and service the respective mortgages of the Properties, such Local Partnership would be required to use reserves and any other funds available to avoid foreclosure of the subject Property. Registrant’s investments in the Local Partnerships are highly leveraged, and there can be no assurance that additional funds would be available to any Local Partnership or Registrant, if needed. In addition, there can be no assurance that, when a Property is sold, the proceeds from a sale will be sufficient to pay the balance due on the mortgage loans or any other outstanding indebtedness to which the Local Partnership is subject.

3

Item 1A. Risk Factors (continued)

There is no guarantee that it will be possible to sell the Properties or, if possible, that Registrant would receive any proceeds from any such sale.

The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period"). It is the General Partner’s intention to sell or assign Registrant’s interests in Local Partnerships subsequent to the expiration of the respective Compliance Periods. It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from any such sales and assignments. Moreover, the Properties may be subject to extended use provisions that provide for the Properties to maintain their low-income status beyond 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). Such provisions may make it unattractive for potential purchasers of the Properties. Accordingly, any sale of a Property may happen well after the expiration of the Compliance Period or may be significantly discounted.

Tax Risks Associated With Low-income Housing and the Low-income Housing Tax Credit

The Local Partnerships may be required to continue to maintain the low-income nature of the Properties beyond the Compliance Period under agreements with state tax credit agencies.

In addition, certain of the Local Partnerships have 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, regardless of any sale of the Properties by the Local Partnerships after the Compliance Period.

Limited partners may not be able to use all of the carried forward Low-income Tax Credits.

While a limited exception is provided for Low-income Tax Credits in the case of individuals, tax losses and credits allocated to a limited partner who is an individual, trust, estate or personal service corporation generally may be used to reduce the limited partner’s tax liability only to the extent that such liability arises from passive activities. Therefore, tax losses and credits allocated to such a limited partner are not expected to be available to offset tax liabilities that arise from salaries, dividends and interest and other forms of income. In addition, Low-income Tax Credits cannot be used to offset alternative minimum tax. Accordingly, there is no guarantee that limited partners will be able to utilize all of the carried forward Low-income Tax Credits.

Risks Relating to Ownership of Units of Limited Partnership Interest of Registrant

There is no existing market for the Units.

There is no trading market for Units and there are no assurances that any market will develop. In addition, the Units may be transferred only if certain requirements are satisfied, including requirements that such transfer would not impair Registrant’s tax status for federal income tax purposes and would not be a violation of federal or state securities laws. Accordingly, limited partners may not be able to sell their Units promptly and bear the economic risk of their investment for an indefinite period of time.

Under certain circumstances, limited partners of Registrant may incur out-of-pocket tax costs.

At some point, Registrant’s operations (including the sale or refinancing of the Properties owned by the Local Partnerships) may generate less cash flow than taxable income, and the income, as well as the income taxes payable with respect to Registrant’s taxable income, may exceed cash flow available for distribution to the limited partners in such years. This may result in an out-of-pocket tax cost to the limited partners. In addition, a limited partner may experience taxable gain or credit recapture on disposition of Units or upon a disposition of the Local Partnership interests or of the Properties even though no cash is realized on the disposition; in such circumstances, the limited partners may experience an out-of-pocket tax cost.

Limited partners of Registrant may not receive a return of any portion of their original capital investment in Registrant.

To date, the limited partners of Registrant have not received a return of any portion of their original capital. Accordingly, the only benefit of this investment may be the Low-income Tax Credits.

4

Item 1B. Unresolved Staff Comments

Not applicable

Item 2.Properties

The executive offices of Registrant and the General Partner are located at 340 Pemberwick Road, Greenwich, Connecticut 06831. Registrant does not own or lease any properties. Registrant pays no rent; all charges for leased space are borne by an affiliate of the General Partner.

Registrant's primary objective has been to provide Low-income Tax Credits to limited partners generally over a ten year period. The relevant state tax credit agency has allocated each of Registrant’s Local Partnerships an amount of Low-income 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 substantially fully exhausted by the Local Partnerships as of December 31, 2003. See discussion above in Item 1A - Risk Factors regarding the Compliance Periods of the Local Partnerships. Also as noted above, certain of the Local Partnerships have 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, regardless of any sale of the Properties by the Local Partnerships after the Compliance Period. Through December 31, 2007, none of the Local Partnerships have suffered an event of recapture of Low-income Tax Credits and, as of December 31, 2007, the Compliance Period of all of the Local Partnerships has expired.

Although Registrant generally owns a 98.9%-99% limited partner interest ("Local Partnership Interest") in the Local Partnerships, Registrant and American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited partnership whose general partner is affiliated with the General Partner, together, in the aggregate, own a 99% Local Partnership Interest in the following Local Partnerships:

	Registrant		ATCP II
Batesville Family, L.P.		61.75%		37.25%
Bruce Housing Associates, L.P.		61.75		37.25
Carrington Limited Dividend Housing Association Limited Partnership (“Carrington”)		65.95		33.05
Ivy Family, L.P.		61.75		37.25
Lawrence Road Properties, Ltd.		61.75		37.25
Mirador del Toa Limited Partnership		59.06		39.94
Purvis Heights Properties, L.P.		61.75		37.25
Queen Lane Investors		48.50		50.50

Many of the Local Partnerships receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8") (see descriptions of subsidies on page 9). The subsidy agreements expire at various times. Since October 1997, the United States Department of Housing and Urban Development (“HUD”) has issued a series of directives related to project based Section 8 contracts that define owners’ notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract. Registrant cannot reasonably 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 including the Section 8 program. Such changes could adversely affect the future net operating income before debt service (“NOI”) and debt structure of any or all Local Partnerships currently receiving such subsidy or similar subsidies. Three Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines.

5

Item 2.Properties (continued)

						Mortgage
Name of Local Partnership	Number of					loans payable as of			Subsidy
Name of apartment complex	rental		Capital			December 31,			(see
Apartment complex location	units		contribution			2007			footnotes)
April Gardens Apartments II Limited Partnership April Gardens Apartments Las Piedras, Puerto Rico		48	$	485,581		$	1,940,817			(1b&c	)
Ashland Park Apartments, L.P. Ashland Park Apartments Ashland, Nebraska		24		235,732			1,007,252			(1b&c	)
Auburn Family, L.P. Auburn Apartments Louisville, Mississippi		16		95,412			444,579			(1b&c	)
Batesville Family, L.P. Westridge Apartments Batesville, Mississippi		48		239,716	(2)		1,402,915			(1b	)
Bay Springs Elderly, L.P. Bay Springs Manor Bay Springs, Mississippi		24		208,820			657,811			(1b&c	)
Brisas del Mar Apartments Limited Partnership Brisas del Mar Apartments Hatillo, Puerto Rico		66		668,172			2,571,899			(1b&c	)
Bruce Housing Associates, L.P. Bruce Family Apartments Bruce, Mississippi		40		183,155	(2)		1,071,790			(1b&c	)
Carrington Limited Dividend Housing Association Limited Partnership (3), (4) Carrington Place Farmington Hills, Michigan		100		2,174,720	(2)		—	(3)
Chestnut Park Associates, L.P. Chestnut Park Apartments East Orange, New Jersey		59		4,204,576			4,461,175			(1a&g	)
Chowan Senior Manor Associates Limited Partnership Azalea Garden Senior Manor Apartments Murfreesboro, North Carolina		33		278,405			1,203,845			(1b&c	)
Christian Street Commons Associates Christian Street Commons Apartments Philadelphia, Pennsylvania		18		581,645			536,317			(1b	)

6

Item 2.Properties (continued)

						Mortgage
Name of Local Partnership	Number of					loans payable as of		Subsidy
Name of apartment complex	rental		Capital			December 31,		(see
Apartment complex location	units		contribution			2007		footnotes)
Country View Apartments Country View Apartments Pembroke, Maine		16	$	279,183		$	910,551		(1b&c	)
Desarrollos de Belen Limited Partnership Vista de Jagueyes II Apartments Aguas Buenas, Puerto Rico		41		422,929			1,827,079		(1b&c	)
Desarrollos de Emaus Limited Partnership Hucares II Apartments Naguabo, Puerto Rico		72		631,404			3,105,194		(1b&c	)
Ellinwood Heights Apartments, L.P. Ellinwood Heights Apartments Ellinwood, Kansas		24		156,261			668,470		(1b&c	)
Fulton Street Houses Limited Partnership Fulton Street Townhouse Apartments New York, New York		35		1,948,081			3,869,930		(1b	)
Hayes Run Limited Partnership Mashburn Gap Apartments Marshall, North Carolina		34		322,074			1,385,839		(1b&c	)
Howard L. Miller Sallisaw Apartments II, L.P. Sallisaw II Apartments Sallisaw, Oklahoma		24		130,158			599,282		(1b&c	)
Hurlock Meadow Limited Partnership Hurlock Meadow Apartments Hurlock, Maryland		30		284,218			1,232,292		(1b&c	)
Ivy Family, L.P. Ivy Apartments Louisville, Mississippi		32		135,528 (2	)		742,126		(1b&c	)
Justin Associates Locust Tower Apartments Philadelphia, Pennsylvania		40		1,809,723			2,098,457		(1a,b&g	)
LaBelle Commons, Ltd. LaBelle Commons LaBelle, Florida		32		253,580			983,627		(1b&c	)
Lawrence Road Properties, Ltd. Hillcrest Apartments Newton, Mississippi		24		123,799 (2	)		737,825		(1b&c	)

7

Item 2.Properties (continued)

						Mortgage
Name of Local Partnership	Number of					loans payable as of		Subsidy
Name of apartment complex	rental		Capital			December 31,		(see
Apartment complex location	units		contribution			2007		footnotes)
Loma Del Norte Limited Partnership Loma Del Norte Apartments Anthony, New Mexico		40	$	314,865		$	1,398,854		(1b&c	)
Long Reach Associates Limited Partnership Oak Ridge Apartments Bath, Maine		30		448,922			1,438,440		(1b&c	)
Mirador del Toa Limited Partnership Mirador del Toa Apartments Toa Alta, Puerto Rico		48		284,847 (2	)		1,822,423		(1b&c	)
Moore Haven Commons, Ltd. Moore Haven Commons Moore Haven, Florida		28		213,402			901,752		(1b&c	)
NP-89 Limited Dividend Housing Association Limited Partnership Newport Apartments Clinton Township, Michigan		168		2,372,292			3,096,140		(1a,b&g	)
Nash Hill Associates, Limited Partnership Nash Hill Place Williamsburg, Massachusetts		28		302,575			1,427,370		(1b,c&e	)
North Calhoun City, L.P. North Calhoun City Apartments Calhoun City, Mississippi		18		146,565			455,102		(1b&c	)
Orange City Plaza, Limited Partnership (5) Orange City Plaza Apartments Orange City, Iowa		32		576,472			382,467		(1f	)
Puerta del Mar Limited Partnership Puerta del Mar Apartments Hatillo, Puerto Rico		66		630,570			2,447,306		(1b&c	)
Purvis Heights Properties, L.P. Pineview Apartments Purvis, Mississippi		40		191,512 (2	)		1,116,418		(1b	)
Queen Lane Investors Queen's Row Philadelphia, Pennsylvania		29		597,050 (2	)		1,647,041		(1b	)
Somerset Manor, Ltd. Somerset Manor Central City, Pennsylvania		24		208,465			873,408		(1b&c	)
Sugar Cane Villas, Ltd. Sugar Cane Villas Pahokee, Florida		87		751,560			3,217,284		(1b&c	)

8

Item 2. Properties (continued)

					Mortgage
Name of Local Partnership	Number				loans payable as of		Subsidy
Name of apartment complex	of rental		Capital		December 31,		(see
Apartment complex location	units		contribution		2007		footnotes)
Summerfield Apartments Limited Partnership Summerfield Apartments Charlotte, North Carolina		52	$	1,088,667	$	1,488,833		(1b	)
Sydney Engel Associates L.P. (formerly known as Sydney Engel Associates) The Castle New York, New York		224		3,201,874		15,460,803		(1b	)
Union Valley Associates Limited Partnership Union Valley Apartments Union Township, Pennsylvania		36		371,589		1,407,722		(1b	)
Walnut Grove Family, L.P. Walnut Grove Apartments Walnut Grove, Mississippi		24		191,695		825,870		(1b&c	)
Waynesboro Apartments Limited Partnership Waynesboro Apartments Waynesboro, Pennsylvania		36		360,859		1,439,826		(1b	)
West Calhoun City, L.P. West Calhoun City Apartments Calhoun City, Mississippi		28		230,212		688,096		(1b&c	)
Westminster Apartments Limited Partnership Westminster Apartments Philadelphia, Pennsylvania		42		1,047,993		1,607,972		(1b&d	)
			$	29,384,966	$	76,602,199

(1) Description of subsidies:

(a) Section 8 of Title II of the Housing and Community Development Act of 1974 allows qualified low-income tenants to pay thirty percent of their monthly income as rent with the balance paid by the federal government.

(b) The Local Partnership’s debt structure includes a principal or interest payment subsidy.

(c) The Rural Housing Service (formerly the Farmers Home Administration) of the United States Department of Agriculture Rental Assistance Program allows qualified low-income tenants to receive rental subsidies.

(d) The City of Philadelphia Housing Authority allows qualified low-income tenants to receive rental certificates.

(e) The Commonwealth of Massachusetts participates in a rental assistance program.

(f) The Northwest Regional Housing Authority provides qualified tenants with a rental subsidy.

(g) The Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines.

9

Item 2. Properties (continued)

(2) Reflects amount attributable to Registrant only.

(3) The Local Partnership Interest is no longer owned by Registrant; there are no assets or liabilities related to the Local Partnership included in the combined balance sheet of the Local Partnerships as of December 31, 2007 in Note 5 to the financial statements.

(4) Registrant assigned its limited partner interest to one of the Local General Partners in February 2007. The combined statement of operations of the Local Partnerships for the year ended December 31, 2007 included in Note 5 to the accompanying financial statements does not include any results of operations for the Local Partnership (see Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, herein).

(5) Capital contribution includes voluntary advances to Local Partnership.

Item 3. Legal Proceedings

Registrant is not aware of any material legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of the limited partners of Registrant during the fourth quarter of the fiscal year covered by this report.

10

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Holders

There is no established public trading market for Registrant’s Units. Accordingly, accurate information as to the market value of a Unit at any given date is not available. The number of record holders of Units as of December 31, 2007 was approximately 1,438, holding an aggregate of 35,883 Units.

Merrill Lynch follows internal guidelines for providing estimated values of limited partnerships and other direct investments reported on client account statements. Pursuant to such guidelines, estimated values for limited partnership interests reported on Merrill Lynch client account statements (such as Registrant’s Units) are provided to Merrill Lynch by independent valuation services, whose estimated values are based on financial and other information available to them. In addition, Registrant may provide an estimate of value to Unit holders from time to time in Registrant's reports to limited partners. The estimated values provided by the independent services and Registrant, which may differ, are not market values and Unit holders may not be able to sell their Units or realize either amount upon a sale of their Units. Unit holders may not realize such estimated values upon the liquidation of Registrant.

Distributions

Registrant owns a limited partner interest in Local Partnerships that are the owners of Properties that are leveraged and receive government assistance in various forms of rental and debt service subsidies. The distribution of cash flow generated by the Local Partnerships may be restricted, as determined by each Local Partnership's financing and subsidy agreements. Accordingly, Registrant does not anticipate that it will provide significant cash distributions to its partners. There were no cash distributions to the partners during the years ended March 30, 2008 and 2007.

Low-income Tax Credits, which are subject to various limitations, may be used by partners to offset federal income tax liabilities. Registrant generated total Low-income Tax Credits from investments in Local Partnerships of approximately $1,559 per Unit. The Ten Year Credit Period for all of the Properties was substantially fully exhausted as of December 31, 2003 and the Compliance Periods of the Local Partnerships had expired as of December 31, 2007.

Recent Sales of Unregistered Securities

None

11

Item 6. Selected Financial Data

The information set forth below presents selected financial data of Registrant. Additional detailed financial information is set forth in the audited financial statements included under Part II, Item 8 herein.

	Years Ended March 30,
	2008			2007			2006			2005			2004
Interest and other revenue	$	82,821		$	95,084		$	142,837		$	176,110		$	193,706
Equity in loss of investment in local partnerships	$	(67,384	)	$	(97,326	)	$	(162,367	)	$	(247,207	)	$	(215,731	)
Gain on disposal of limited partner interests/local partnership properties	$	—		$	149,895		$	—		$	—		$	—
Net loss	$	(551,682	)	$	(431,945	)	$	(620,078	)	$	(640,259	)	$	(611,662	)
Net loss per unit of limited partnership interest	$	—		$	—		$	(11.44	)	$	(17.66	)	$	(16.88	)

	As of March 30,
	2008		2007		2006		2005		2004
Total assets	$	1,755,863	$	1,967,060	$	2,109,756	$	2,747,749	$	3,766,895

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Capital Resources and Liquidity

Registrant admitted limited partners in four closings with aggregate limited partners’ capital contributions of $35,883,000. In connection with the offering of the sale of Units, Registrant incurred organization and offering costs of approximately $4,419,000 and established a working capital reserve of approximately $2,153,000. The remaining net proceeds of approximately $29,311,000 (the “Net Proceeds”) were available to be applied to the acquisition of limited partner interests in local partnerships (the “Local Partnerships”) that own low-income multifamily residential complexes (the “Property” or “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”). The Net Proceeds were utilized in acquiring an interest in forty-three Local Partnerships.

As of March 30, 2008, Registrant has cash and cash equivalents and investments in bonds totaling $1,251,256, which is available for operating expenses of Registrant and circumstances which may arise in connection with the Local Partnerships. As of March 30, 2008, Registrant’s investments in bonds represent U.S. Treasury debt securities of $870,596 that matured in May 2008. Registrant acquired such investments in bonds with the intention of utilizing proceeds generated by such investments to meet its annual obligations. Future sources of Registrant funds are expected to be primarily from interest earned on working capital and limited cash distributions from Local Partnerships.

During the year ended March 30, 2008, Registrant received cash from interest revenue, maturities/redemptions and sales of bonds, and distributions from Local Partnerships and utilized cash for operating expenses and making voluntary advances to a Local Partnership (see discussion below under Local Partnership Matters). Cash and cash equivalents and investments in bonds decreased, in the aggregate, by approximately $139,000 during the year ended March 30, 2008, (which includes a net unrealized loss on investments in bonds of approximately $5,000 and the accretion of zero coupon bonds of approximately $48,000).

During the year ended March 30, 2008, the investment in local partnerships decreased as a result of Registrant’s equity in the Local Partnerships’ net loss for the year ended December 31, 2007 of $67,384 and cash distributions received from Local Partnerships of $20,000 (exclusive of distributions from Local Partnerships of $26,118 classified as other income), partially offset by voluntary advances to a Local Partnership of $15,179 (see discussion below under Local Partnership Matters). Accounts payable and accrued expenses and payable to general partner and affiliates in the accompanying balance sheet as of March 30, 2008 include cumulative deferred administration fees and management fees of $3,161,968.

12

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Results of Operations

Registrant’s operating results are dependent upon the operating results of the Local Partnerships and are significantly 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. 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, the reported equity in loss of investment in local partnerships is expected to decrease as Registrant's investment balances in the respective Local Partnerships become zero. The combined statements of operations of the Local Partnerships reflected in Note 5 to Registrant’s financial statements include the operating results of all Local Partnerships, irrespective of Registrant’s investment balances.

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. In addition, the book value of Registrant’s investment in each Local Partnership (the “Local Partnership Carrying Value”) may be reduced if the Local Partnership Carrying Value is considered to exceed the estimated value derived by management. Accordingly, cumulative losses and cash distributions in excess of the investment or an adjustment to a Local Partnership’s Carrying Value are not necessarily indicative of adverse operating results of a Local Partnership. See discussion below under Local Partnership Matters regarding certain Local Partnerships currently operating below economic break even levels.

Registrant’s operations for the years ended March 30, 2008, 2007, and 2006 resulted in net losses of $551,682, $431,945, and $620,078, respectively. The increase in net loss from fiscal 2007 to fiscal 2008 is primarily attributable to a gain of approximately $150,000 recognized in fiscal 2007 in connection with Registrant’s disposal of its interest in Carrington Limited Dividend Housing Association Limited Partnership (“Carrington”), partially offset by a decrease in equity in loss of investment in local partnerships of approximately $30,000, which decrease is the result of a decrease in voluntary advances made to a Local Partnership that were written off as equity in loss of investment in local partnerships, partially offset by an increase in the net operating loss of the Local Partnership in which Registrant continues to have an investment balance. The decrease in net loss from fiscal 2006 to fiscal 2007 is primarily attributable to a decrease in equity in loss of investment in local partnerships of approximately $65,000, which decrease is primarily the result of an increase in the nonrecognition of losses in accordance with the equity method of accounting, and a gain of approximately $150,000 recognized in fiscal 2007 in connection with Registrant’s disposal of its interest in Carrington.

The Local Partnerships’ net loss of approximately $2,712,000 for the year ended December 31, 2007 includes depreciation and amortization expense of approximately $3,938,000 and interest on non-mandatory debt of approximately $392,000, and does not include required principal payments on permanent mortgages of approximately $826,000. The Local Partnerships’ net loss of approximately $2,975,000 for the year ended December 31, 2006 includes depreciation and amortization expense of approximately $4,160,000 and interest on non-mandatory debt of approximately $385,000, and does not include required principal payments on permanent mortgages of approximately $846,000. The Local Partnerships’ net loss of approximately $2,753,000 for the year ended December 31, 2005 includes depreciation and amortization expense of approximately $4,124,000 and interest on non-mandatory debt of approximately $374,000, and does not include required principal payments on permanent mortgages of approximately $882,000. The results of operations of the Local Partnerships for the year ended December 31, 2007 are not necessarily indicative of the results that may be expected in future periods.

Local Partnership Matters

Registrant's primary objective has been to provide Low-income Tax Credits to limited partners generally over a ten year period. The relevant state tax credit agency has allocated each of Registrant’s Local Partnerships an amount of Low-income 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 substantially fully exhausted by the Local Partnerships as of December 31, 2003. The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period"). In addition, certain of the Local Partnerships have 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, regardless of any sale of the Properties by the Local Partnerships after the Compliance Period. The Properties must satisfy various requirements including rent restrictions and tenant income limitations (the "Low-income Tax Credit Requirements") in order to maintain eligibility for the recognition of the Low-income Tax Credit at all times during the Compliance Period. Once a Local Partnership has become eligible for the Low-income Tax Credit, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the Low-income Tax Credit Requirements. Through December 31, 2007, none of the Local Partnerships have suffered an event of recapture of Low-income Tax Credits and, as of December 31, 2007, the Compliance Period of all of the Local Partnerships has expired. It is the General Partner’s intention to sell or assign Registrant’s interests in Local Partnerships subsequent to the expiration of the respective Compliance Periods. It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales and assignments.

13

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Low-income Tax Credit Requirements. Through December 31, 2007, none of the Local Partnerships have suffered an event of recapture of Low-income Tax Credits and, as of December 31, 2007, the Compliance Period of all of the Local Partnerships has expired. It is the General Partner’s intention to sell or assign Registrant’s interests in Local Partnerships subsequent to the expiration of the respective Compliance Periods. It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales and assignments.

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and Puerto Rico. Many of the Local Partnerships receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8"). The subsidy agreements expire at various times. Since October 1997, the United States Department of Housing and Urban Development (“HUD”) has issued a series of directives related to project based Section 8 contracts that define owners’ notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract. Registrant cannot reasonably 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 including the Section 8 program. 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 subsidy or similar subsidies. Three Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines.

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"). During the year ended December 31, 2007, revenue from operations of the Local Partnerships was generally sufficient to cover operating expenses and Mandatory Debt Service. Substantially all of the Local Partnerships are effectively operating at or above break even levels, although certain Local Partnerships' operating information reflects operating deficits that do not represent cash deficits due to their mortgage and financing structure and the required deferral of property management fees. However, as discussed below, certain Local Partnerships’ operating information indicates an operating deficit after taking into account their mortgage and financing structure and any required deferral of property management fees.

The terms of the partnership agreement of Westminster Apartments Limited Partnership (“Westminster”) require the Local General Partner of Westminster to advance funds to cover operating deficits through the Compliance Period. Westminster has, for several years, been in default under the terms of its first mortgage; delinquent payments of principal and interest, replacement reserve deposits and certain fees represent a cumulative arrearage of approximately $800,000 as of June 2008. The lender has indicated a willingness to restructure the debt, whereby payments will be required only to the extent that Westminster generates available annual cash flow; in addition, the lender would receive all residual proceeds upon the sale of Westminster. There can be no assurance that the issues will be resolved and the mortgage remains in default without a formal forbearance as of June 2008. Westminster incurred an operating deficit of approximately $132,000 for the year ended December 31, 2007, which amount includes a provision for replacement reserve deposits of $1,184 per month and debt service payments of $6,245 per month. Registrant’s investment balance in Westminster, after cumulative equity losses, became zero during the year ended March 30, 1999. The Compliance Period for Westminster has expired.

The terms of the partnership agreement of Orange City Plaza Limited Partnership (“Orange City”) require the Local General Partner of Orange City to cause the management agent to defer property management fees in order to avoid a default under the mortgage. Orange City incurred an operating deficit of approximately $33,000 for the year ended December 31, 2007, which includes property management fees of approximately $5,000. The Local General Partner of Orange City represents that payments on the mortgage and real estate taxes are current. Registrant made voluntary advances to Orange City of $15,179 during the year ended March 31, 2008 to fund operating deficits. Cumulative voluntary advances as of March 31, 2008 and 2007 are $120,490 and $105,311, respectively. Registrant’s investment balance in Orange City, after cumulative equity losses, became zero during the year ended March 30, 2002 and voluntary advances made by Registrant have been offset by additional equity in loss of investment in local partnerships. The Compliance Period for Orange City has expired.

14

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Fulton Street Houses Limited Partnership (“Fulton Street”) has an escrow of approximately $68,000 as of December 31, 2007 to cover operating deficits and there are no Mandatory Debt Service payments or real estate taxes required during the Compliance Period. Fulton Street incurred an operating deficit of approximately $61,000 for the year ended December 31, 2007. Registrant’s investment balance in Fulton Street, after cumulative equity losses, became zero during the year ended March 30, 2002. The Compliance Period for Fulton Street has expired.

The terms of the partnership agreement of Justin Associates (“Justin”) require the Local General Partners of Justin to cause the management agent to defer property management fees in order to avoid a default under the mortgage. Justin incurred an operating deficit of approximately $94,000 for the ended December 31, 2007, which includes property management fees of approximately $15,000. The Local General Partners of Justin represent that payments on the mortgage and real estate taxes are current. Registrant’s investment balance in Justin, after cumulative equity losses, became zero during the year ended March 30, 2002. The Compliance Period for Justin has expired.

The Local General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner of Queen Lane regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner of Queen Lane requested that the Agency cancel the Section 8 voucher contract in connection with the Property. As a result, the Property has been vacant since October 2007. Two of Queen Lane’s mortgages matured in 2007 but have not been repaid, representing principal and accrued interest in excess of $1,790,000 as of June 2008. The Local General Partner of Queen Lane further represents that the lender has not issued a notice of default and that real estate taxes are in arrears approximately $8,000 as of June 2008. The Local General Partner of Queen Lane is examining the potential to sell the Property. Registrant’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001. The Compliance Period for Queen Lane has expired.

The terms of the partnership agreement of Christian Street Commons Associates (“Christian Street”) require the Local General Partners of Christian Street to advance funds to cover operating deficits up to $150,000 through 2008 and to cause the management agent to defer property management fees in order to avoid a default under the mortgage. Christian Street incurred an operating deficit of approximately $28,000 for the year ended December 31, 2007, which includes property management fees of approximately $4,000. The Local General Partners of Christian Street represent that payments on the mortgage and real estate taxes are current. Registrant’s investment balance in Christian Street, after cumulative equity losses, became zero during the year ended March 30, 1998. The Compliance Period for Christian Street has expired.

Inflation

Inflation is not expected to have a material adverse impact on Registrant’s operations.

Contractual Obligations

As of March 30, 2008, Registrant has the following contractual obligations (payments due by period):

	Total		< 1 year		1 - 3 years		3 - 5 years		> 5 years
Other Long Term Liabilities:
Accounts Payable and Accrued Expenses (1)	$	440,673	$	—	$	440,673	$	—	$	—
Payable to General Partner and Affiliates (2)		2,721,295		—		2,721,295		—		—
	$	3,161,968	$	—	$	3,161,968	$	—	$	—

(1) Represents Administration Fees payable to a third-party former service provider; such amount is payable from available reserves or sale or refinancing proceeds from the Local Partnerships to the extent such amounts are available.

(2) Represents Administration and Management Fees payable to an affiliate of the General Partner; such amount is payable from available reserves or sale or refinancing proceeds from the Local Partnerships to the extent such amounts are available.

15

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Off - Balance Sheet Arrangements

None

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (“GAAP”) and expands disclosures about fair value measurements. SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements. Accordingly, SFAS 157 does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. Registrant plans to adopt SFAS 157 beginning March 31, 2008. Registrant is currently assessing what impact, if any, the adoption of SFAS 157 will have on its financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 provides entities with an option to report selected financial assets and liabilities at fair value. Furthermore, SFAS 159 establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 is effective for fiscal years beginning after November 15, 2007. Registrant is currently evaluating the impact of SFAS 159 on its financial statements.

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS 141R”). SFAS 141R changes the accounting for acquisitions, specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, and disallowing the capitalization of transaction costs and delays when restructurings related to acquisitions can be recognized. The standard is effective for fiscal years ending after December 15, 2008. Registrant does not anticipate that SFAS 141R will have an impact on its financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 replaces the concept of minority interest with noncontrolling interests in subsidiaries. Noncontrolling interests will now be reported as a component of equity in the consolidated statement of financial position. Earnings attributable to noncontrolling interests will continue to be reported as a part of consolidated earnings; however, SFAS 160 requires that income attributable to both controlling and noncontrolling interests be presented separately on the face of the consolidated income statement. In addition, SFAS 160 provides that when losses attributable to noncontrolling interests exceed the noncontrolling interest’s basis, losses continue to be attributed to the noncontrolling interest as opposed to being absorbed by the consolidating entity. SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of SFAS 160 shall be applied prospectively. SFAS 160 is effective for the first annual reporting period beginning on or after December 15, 2008. Registrant does not anticipate that SFAS 160 will have an impact on its financial statements.

16

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with GAAP, which requires Registrant to make certain estimates and assumptions. A summary of significant accounting policies is provided in Note 1 to the financial statements. 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 financial statements.

· Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting since Registrant does not control the operations of a Local Partnership.

· If the book value of Registrant’s investment in a Local Partnership exceeds the estimated value derived by management, Registrant reduces its investment in any such Local Partnership and includes such reduction in equity in loss of investment in local partnerships. Registrant makes such assessment at least annually in the fourth quarter of its fiscal year or whenever there are indications that a permanent impairment may have occurred.A loss in value of an investment in a Local Partnership other than a temporary decline would be recorded as an impairment loss. Impairment is measured by comparing the investment carrying amount to the estimated residual value of the investment.

· Registrant does not consolidate the accounts and activities of the Local Partnerships, which are considered Variable Interest Entities under FASB Interpretation No. 46 - Revised, “Consolidation of Variable Interest Entities,” 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 strength of the Local General Partners.

Item 7a. Quantitative and Qualitative Disclosure About Market Risk

None - Registrant’s investments in bonds matured in May 2008 without any adverse market impact.

17

AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 8.  Financial Statements and Supplementary Data

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm	19
Balance Sheets	20
Statements of Operations	21
Statements of Changes in Partners' Equity (Deficit)	22
Statements of Cash Flows	23
Notes to Financial Statements	25

No financial statement schedules are included because of the absence of the conditions under which they are required or because the information is included in the financial statements or the notes thereto.

18

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

American Tax Credit Properties III L.P.

We have audited the accompanying balance sheets of American Tax Credit Properties III L.P. (the “Partnership”) as of March 30, 2008 and 2007, and the related statements of operations, changes in partners' equity (deficit) and cash flows for each of the three years in the period ended March 30, 2008. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. As of and for the years ended March 30, 2008, 2007 and 2006, we did not audit the financial statements of certain investee partnerships, which investments represent $504,607 and $0, respectively, in total assets as of March 30, 2008 and 2007, and $52,205, $0 and $156,237, respectively, of total losses for the years ended March 30, 2008, 2007 and 2006. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to those investee partnerships, is based solely on the reports of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits, and the reports of the other auditors, provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of American Tax Credit Properties III L.P. as of March 30, 2008 and 2007, and the results of its operations, changes in partners’ equity (deficit) and its cash flows for each of the three years in the period ended March 30, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Bethesda, Maryland

July 8, 2008

19

AMERICAN TAX CREDIT PROPERTIES III L.P.

BALANCE SHEETS

MARCH 30, 2008 AND 2007

	Notes		2008			2007
ASSETS
Cash and cash equivalents		3,9	$	380,660		$	164,013
Investments in bonds		4,9		870,596			1,226,235
Investment in local partnerships		5,8		504,607			576,812
			$	1,755,863		$	1,967,060
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses		8	$	538,625		$	530,807
Payable to general partner and affiliates		6,8		2,721,295			2,393,732
				3,259,920			2,924,539
Commitments and contingencies		5,8
Partners' equity (deficit)		2,4
General partner				(1,507,483	)		(955,801	)
Limited partners (35,883 units of limited partnership interest outstanding)
Accumulated other comprehensive income (loss), net				3,426			(1,678	)
				(1,504,057	)		(957,479	)
			$	1,755,863		$	1,967,060

See Notes to Financial Statements.

20

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF OPERATIONS

YEARS ENDED MARCH 30, 2008, 2007 AND 2006

	Notes		2008			2007			2006
REVENUE
Interest			$	56,703		$	72,044		$	97,334
Other income from local partnerships				26,118			23,040			45,503
TOTAL REVENUE				82,821			95,084			142,837
EXPENSES
Administration fees - affiliate		6,8		221,540			228,313			230,571
Management fees - affiliate		6,8		221,540			228,313			230,571
Professional fees				80,084			68,965			78,597
State of New Jersey filing fees				21,412			25,667			34,337
Printing, postage and other				22,543			28,340			26,472
TOTAL EXPENSES				567,119			579,598			600,548
				(484,298	)		(484,514	)		(457,711	)
Equity in loss of investment in local partnerships		5		(67,384	)		(97,326	)		(162,367	)
Loss prior to gain on disposal of limited partner interests/local partnership properties				(551,682	)		(581,840	)		(620,078	)
Gain on disposal of limited partner interests/local partnership properties		5					149,895
NET LOSS				(551,682	)		(431,945	)		(620,078	)
Other comprehensive income (loss), net		4		5,104			(5,270	)		(51,901	)
COMPREHENSIVE LOSS			$	(546,578	)	$	(437,215	)	$	(671,979	)
NET LOSS ATTRIBUTABLE TO		2
General partner			$	(551,682	)	$	(431,945	)	$	(209,521	)
Limited partners										(410,557	)
			$	(551,682	)	$	(431,945	)	$	(620,078	)
NET LOSS per unit of limited partnership interest (35,883 units of limited partnership interest)			$	—		$	—		$	(11.44	)

See Notes to Financial Statements.

21

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)

YEARS ENDED MARCH 30, 2008, 2007 AND 2006

	General			Limited			Accumulated Other Comprehensive
	Partner			Partners			Income (Loss), Net			Total
Partners' equity (deficit), March 30, 2005	$	(314,335	)	$	410,557		$	55,493		$	151,715
Net loss		(209,521	)		(410,557	)					(620,078	)
Other comprehensive loss, net								(51,901	)		(51,901	)
Partners' equity (deficit), March 30, 2006		(523,856	)		—			3,592			(520,264	)
Net loss		(431,945	)								(431,945	)
Other comprehensive loss, net								(5,270	)	(5,270)
Partners' deficit, March 30, 2007		(955,801	)		—			(1,678	)	(957,479)
Net loss		(551,682	)								(551,682	)
Other comprehensive income, net								5,104			5,104
Partners' equity (deficit), March 30, 2008	$	(1,507,483	)	$	—		$	3,426		$	(1,504,057	)

See Notes to Financial Statements.

22

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS

YEARS ENDED MARCH 30, 2008, 2007 AND 2006

	2008			2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received	$	8,385		$	14,109		$	18,179
Cash paid for
administration fees		(15,517	)		(15,553	)		(248,578	)
management fees		(100,000	)		(159,334	)		(190,479	)
professional fees		(89,880	)		(51,852	)		(75,873	)
State of New Jersey filing fees		(22,369	)		(30,000	)		(27,171	)
printing, postage and other expenses		(3,972	)		(28,340	)		(24,461	)
Net cash used in operating activities		(223,353	)		(270,970	)		(548,383	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds in connection with disposal of limited partner interests/local partnership properties					149,895
Voluntary advances to local partnerships		(15,179	)		(105,311	)
Cash distributions from local partnerships		46,118			33,040			55,984
Maturities/redemptions and sales of bonds		409,061			205,989			585,768
Net cash provided by investing activities		440,000			283,613			641,752
Net increase in cash and cash equivalents		216,647			12,643			93,369
Cash and cash equivalents at beginning of year		164,013			151,370			58,001
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	380,660		$	164,013		$	151,370
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds, net	$	5,104		$	(5,270	)	$	(51,901	)

See reconciliation of net loss to net cash used in operating activities on page 24.

See Notes to Financial Statements.

23

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS - (Continued)

YEARS ENDED MARCH 30, 2008, 2007 AND 2006

	2008			2007			2006
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss	$	(551,682	)	$	(431,945	)	$	(620,078	)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in loss of investment in local partnerships		67,384			97,326			162,367
Gain on disposal of limited partner interests/local partnership properties					(149,895	)
Distributions from local partnerships classified as other income		(26,118	)		(23,040	)		(45,503	)
Gain on redemptions and sales of bonds					(4,447	)
Amortization of net premium on investments in bonds					927			1,423
Accretion of zero coupon bonds		(48,318	)		(56,059	)		(80,533	)
Decrease (increase) in interest receivable					1,644			(45	)
Increase in payable to general partner and affiliates		327,563			281,739			138,085
Increase (decrease) in accounts payable and accrued expenses		7,818			12,780			(104,099	)
NET CASH USED IN OPERATING ACTIVITIES	$	(223,353	)	$	(270,970	)	$	(548,383	)

See Notes to Financial Statements.

24

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS

MARCH 30, 2008, 2007 AND 2006

1. Organization, Purpose and Summary of Significant Accounting Policies

American Tax Credit Properties III L.P. (the "Partnership") was formed on September 21, 1989 and the Certificate of Limited Partnership of the Partnership was filed under the Delaware Revised Uniform Limited Partnership Act. There was no operating activity until admission of the limited partners on June 13, 1990. The Partnership was formed to invest primarily in leveraged low-income multifamily residential complexes (the “Property” or “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”), through the acquisition of limited partner equity interests (the "Local Partnership Interests") in partnerships (the "Local Partnership" or "Local Partnerships") that are the owners of the Properties. Richman Tax Credit Properties III L.P. (the "General Partner") was formed on September 21, 1989 to act as the general partner of the Partnership.

Basis of Accounting and Fiscal Year

The Partnership's records are maintained on the accrual basis of accounting for both financial reporting and tax purposes. For financial reporting purposes, the Partnership's fiscal year ends March 30 and its quarterly periods end June 29, September 29 and December 30. The Local Partnerships have a calendar year for financial reporting purposes. The Partnership and the Local Partnerships each have a calendar year for income tax purposes.

Investment in Local Partnerships

The Partnership accounts for its investment in local partnerships in accordance with the equity method of accounting, under which the investment is carried at cost and is adjusted for the Partnership's share of each Local Partnership’s results of operations and by cash distributions received. 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. Previously unrecognized equity in loss of any Local Partnership is recognized in the fiscal year in which equity in income is earned by such Local Partnership or additional investment is made by the Partnership. Distributions received subsequent to the elimination of an investment balance for any such investment in a Local Partnership are recorded as other income from local partnerships.

The Partnership assesses the carrying value of its investment in local partnerships at least annually in the fourth quarter of its fiscal year or whenever there are indications that a permanent impairment may have occurred. If the carrying value of an investment in a Local Partnership exceeds the estimated value derived by management, the Partnership reduces its investment in any such Local Partnership and includes such reduction in equity in loss of investment in local partnerships. A loss in value of an investment in a Local Partnership other than a temporary decline would be recorded as an impairment loss.  Impairment is measured by comparing the investment carrying amount to the estimated residual value of the investment.

The Partnership does not consolidate the accounts and activities of the Local Partnerships, which are considered Variable Interest Entities under Financial Accounting Standards Board (“FASB”) Interpretation No. 46 - Revised, “Consolidation of Variable Interest Entities,” because the Partnership is not considered the primary beneficiary. The Partnership’s balance in investment in local partnerships represents the maximum exposure to loss in connection with such investments. The Partnership's exposure to loss on the Local Partnerships is mitigated by the condition and financial performance of the underlying Properties as well as the strength of the local general partners (the “Local General Partners”).

Advances made to Local Partnerships are recorded as investment in local partnerships. Such advances are considered by the Partnership to be voluntary loans to the respective Local Partnerships and the Partnership may be reimbursed at a future date to the extent such Local Partnerships generate distributable cash flow or receive proceeds from sale or refinancing. The Partnership recognizes additional equity in loss of investment in local partnerships to the extent of such voluntary advances.

25

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

1. Organization, Purpose and Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

The Partnership considers all highly liquid investments purchased with an original maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents are stated at cost, which approximates market value.

Income Taxes

No provision for income taxes has been made because all income, losses and tax credits are allocated to the partners for inclusion in their respective tax returns. In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 109, "Accounting for Income Taxes," the Partnership has included in Note 7 disclosures related to differences in the book and tax bases of accounting.

Investments in Bonds

Investments in bonds are classified as available-for-sale and represent investments that the Partnership intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell an investment would be based on various factors, including significant movements in interest rates and liquidity needs. Investments in bonds are carried at estimated fair value and unrealized gains or losses are included as items of comprehensive income (loss) and are reported as a separate component of partners' equity (deficit).

Premiums and discounts on investments in bonds are amortized (accreted) using the effective yield method over the life of the investment. Amortized premiums offset interest revenue, while the accretion of discounts and zero coupon bonds are included in interest revenue. Realized gain (loss) on redemptions or sales of investments in bonds are included in, or offset against, interest revenue on the basis of the adjusted cost of each specific investment redeemed or sold.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements. Accordingly, SFAS 157 does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The Partnership plans to adopt SFAS 157 beginning March 31, 2008. The Partnership is currently assessing what impact, if any, the adoption of SFAS 157 will have on its financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 provides entities with an option to report selected financial assets and liabilities at fair value. Furthermore, SFAS 159 establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Partnership is currently evaluating the impact of SFAS 159 on its financial statements.

26

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

1. Organization, Purpose and Summary of Significant Accounting Policies (continued)

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS 141R”). SFAS 141R changes the accounting for acquisitions, specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, and disallowing the capitalization of transaction costs and delays when restructurings related to acquisitions can be recognized. The standard is effective for fiscal years ending after December 15, 2008. The Partnership does not anticipate that SFAS 141R will have an impact on its financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 replaces the concept of minority interest with noncontrolling interests in subsidiaries. Noncontrolling interests will now be reported as a component of equity in the consolidated statement of financial position. Earnings attributable to noncontrolling interests will continue to be reported as a part of consolidated earnings; however, SFAS 160 requires that income attributable to both controlling and noncontrolling interests be presented separately on the face of the consolidated income statement. In addition, SFAS 160 provides that when losses attributable to noncontrolling interests exceed the noncontrolling interest’s basis, losses continue to be attributed to the noncontrolling interest as opposed to being absorbed by the consolidating entity. SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of SFAS 160 shall be applied prospectively. SFAS 160 is effective for the first annual reporting period beginning on or after December 15, 2008. The Partnership does not anticipate that SFAS 160 will have an impact on its financial statements.

2. Capital Contributions

On March 12, 1990, the Partnership commenced the offering of units (the “Units”) through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Selling Agent"). On June 13, 1990, December 27, 1990, December 31, 1991 and January 23, 1992, under the terms of the Amended and Restated Agreement of Limited Partnership of the Partnership (the "Partnership Agreement"), the General Partner admitted limited partners to the Partnership in four closings. At these closings, subscriptions for a total of 35,883 Units representing $35,883,000 in limited partners' capital contributions were accepted. In connection with the offering of Units, the Partnership incurred organization and offering costs of $4,418,530, of which $75,000 was capitalized as organization costs and $4,343,530 was charged to the limited partners' equity as syndication costs. The Partnership received a capital contribution of $100 from the General Partner.

Net loss is allocated 99% to the limited partners and 1% to the General Partner in accordance with the Partnership Agreement, until such time as the limited partners' capital reaches zero as a result of loss allocations, after which all losses are allocated to the General Partner.

3. Cash and Cash Equivalents

As of March 30, 2008, the Partnership has cash and cash equivalents of $380,660 that are deposited in interest bearing accounts in a financial institution insured by the Securities Investor Protection Corporation (“SIPC”). Such accounts have coverage which is limited to $500,000; while SIPC provides insurance for funds which are misappropriated, it does not insure amounts which may be lost as a result of changes in market conditions. At times, balances may exceed the insured limit.

27

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

4. Investments in Bonds

The Partnership carries its investments in bonds as available-for-sale because such investments are used to facilitate and provide flexibility for the Partnership's obligations, including the providing of voluntary operating advances resulting from circumstances that may arise in connection with the Local Partnerships. Investments in bonds are reflected in the accompanying balance sheets at estimated fair value.

As of March 30, 2008, certain information concerning investments in bonds is as follows:

Description and maturity	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
U.S. Treasury debt securities
Within one year	$	867,170	$	3,426	$	—	$	870,596

As of March 30, 2007, certain information concerning investments in bonds is as follows:

Description and maturity	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury debt securities
Within one year	$	399,571	$	—	$	(515	)	$	399,056
After one year through five years		828,342		—		(1,163	)		827,179
	$	1,227,913	$	—	$	(1,678	)	$	1,226,235

28

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships

As of March 30, 2008, the Partnership owns a limited partnership interest in the following Local Partnerships:

1.	April Gardens Apartments II Limited Partnership;
2.	Ashland Park Apartments, L.P.;
3.	Auburn Family, L.P.;
4.	Batesville Family, L.P.;
5.	Bay Springs Elderly, L.P.;
6.	Brisas del Mar Apartments Limited Partnership;
7.	Bruce Housing Associates, L.P.;
8.	Chestnut Park Associates, L.P.*;
9.	Chowan Senior Manor Associates Limited Partnership;
10.	Christian Street Commons Associates;
11.	Country View Apartments;
12.	Desarrollos de Belen Limited Partnership;
12.	Desarrollos de Emaus Limited Partnership;
14.	Ellinwood Heights Apartments, L.P. (“Ellinwood Heights”);
15.	Fulton Street Houses Limited Partnership;
16.	Hayes Run Limited Partnership;
17.	Howard L. Miller Sallisaw Apartments II, L.P.;
18.	Hurlock Meadow Limited Partnership;
29.	Ivy Family, L.P.;
20.	Justin Associates;
21.	LaBelle Commons, Ltd.;
22.	Lawrence Road Properties, Ltd.;
23.	Loma Del Norte Limited Partnership;
24.	Long Reach Associates Limited Partnership;
25.	Mirador del Toa Limited Partnership;
26.	Moore Haven Commons, Ltd.;
27.	NP-89 Limited Dividend Housing Association Limited Partnership;
28.	Nash Hill Associates, Limited Partnership;
29.	North Calhoun City, L.P.;
30.	Orange City Plaza, Limited Partnership (“Orange City”);
31.	Puerta del Mar Limited Partnership;
32.	Purvis Heights Properties, L.P.;
33.	Queen Lane Investors (“Queen Lane”);
34.	Somerset Manor, Ltd.;
35.	Sugar Cane Villas, Ltd.;
36.	Summerfield Apartments Limited Partnership;
37.	Sydney Engel Associates L.P. (formerly known as Sydney Engel Associates)*;
38.	Union Valley Associates Limited Partnership;
39.	Walnut Grove Family, L.P.;
40.	Waynesboro Apartments Limited Partnership;
41.	West Calhoun City, L.P.; and
42.	Westminster Apartments Limited Partnership (“Westminster”).

* An affiliate of the General Partner is a general partner or special limited partner of and/or provides services to the Local Partnership.

29

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

Although the Partnership generally owns a 98.9%-99% limited partner interest in the Local Partnerships, the Partnership and American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited partnership whose general partner is affiliated with the General Partner, together, in the aggregate, own a 99% interest in the following Local Partnerships:

	The Partnership		ATCP II
Batesville Family, L.P.		61.75%		37.25%
Bruce Housing Associates, L.P.		61.75		37.25
Carrington Limited Dividend Housing Association Limited Partnership (“Carrington”)		65.95		33.05
Ivy Family, L.P.		61.75		37.25
Lawrence Road Properties, Ltd.		61.75		37.25
Mirador del Toa Limited Partnership		59.06		39.94
Purvis Heights Properties, L.P.		61.75		37.25
Queen Lane Investors		48.50		50.50

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and Puerto Rico. The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period"). The rents of the Properties are controlled by federal and state agencies pursuant to applicable laws and regulations. Under the terms of each of the Local Partnership's partnership agreements, as of March 30, 2008 the Partnership is committed to make capital contributions in the aggregate amount of $29,384,966, which includes voluntary advances made to a certain Local Partnership and all of which has been paid. As of December 31, 2007, the Local Partnerships have outstanding mortgage loans payable totaling approximately $76,602,000 and accrued interest payable on such loans totaling approximately $5,833,000, which are secured by security interests and liens common to mortgage loans on the Local Partnerships' real property and other assets.

Equity in loss of investment in local partnerships is limited to the Partnership’s investment balance in each Local Partnership; any such excess is applied to other partners' capital in any such Local Partnership (see Note 1). The amount of such excess losses applied to other partners' capital was $2,461,655, $2,668,471, and $2,360,295 for the years ended December 31, 2007, 2006 and 2005, respectively, as reflected in the combined statements of operations of the Local Partnerships reflected herein Note 5.

Westminster has, for several years, been in default under the terms of its first mortgage; delinquent payments of principal and interest, replacement reserve deposits and certain fees represent a cumulative arrearage of approximately $800,000 as of June 2008. The lender has indicated a willingness to restructure the debt, whereby payments will be required only to the extent that Westminster generates available annual cash flow; in addition, the lender would receive all residual proceeds upon the sale of Westminster. There can be no assurance that the issues will be resolved and the mortgage remains in default without a formal forbearance as of June 2008. The Partnership’s investment balance in Westminster, after cumulative equity losses, became zero during the year ended March 30, 1999.

The Local General Partner of Queen Lane represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner of Queen Lane regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner of Queen Lane requested that the Agency cancel the Section 8 voucher contract in connection with the Property. As a result, the Property has been vacant since October 2007. Two of Queen Lane’s mortgages matured in 2007 but have not been repaid, representing principal and accrued interest in excess of $1,790,000 as of June 2008. The Local General Partner of Queen Lane further represents that the lender has not issued a notice of default and that real estate taxes are in arrears approximately $8,000 as of June 2008. The Local General Partner of Queen Lane is examining the potential to sell the Property. The Partnership’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001.

30

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

The Partnership made voluntary advances of $15,179 and $105,311 to Orange City for the years ended March 30, 2008 and 2007, respectively, to fund operating deficits. Cumulative voluntary advances as of March 30, 2008 and 2007 are $120,490 and $105,311, respectively. The Partnership’s investment balance in Orange City, after cumulative equity losses, became zero during the year ended March 30, 2002 and voluntary advances made by the Partnership have been recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships in the accompanying financial statements.

As a result of management’s assessment of the carrying value of the investment in local partnerships under applicable accounting guidelines (see Note 1), the Partnership reduced its investment in Ellinwood Heights by $6,130 for the year ended March 30, 2006. Such loss is included in equity in loss of investment in local partnerships in the accompanying statement of operations of the Partnership for the year ended March 30, 2006.

Effective February 2007, the Partnership assigned its limited partner interest in Carrington to one of Carrington’s general partners, whereby the Partnership received $149,895. Such amount is reflected as gain on disposal of limited partner interests/local partnership properties in the accompanying statement of operations of the Partnership for the year ended March 30, 2007.

The combined balance sheets of the Local Partnerships as of December 31, 2007 and 2006 and the combined statements of operations of the Local Partnerships for the years ended December 31, 2007, 2006 and 2005 are reflected on pages 32 and 33, respectively.

31

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

The combined balance sheets of the Local Partnerships as of December 31, 2007 and 2006 are as follows:

	2007			2006
ASSETS
Cash and cash equivalents	$	1,432,375		$	1,575,290
Rents receivable		570,510			464,095
Escrow deposits and reserves		4,735,459			5,591,786
Land		3,710,215			3,910,215
Buildings and improvements (net of accumulated depreciation of $62,997,117 and $63,114,230)		48,507,023			54,101,042
Intangible assets (net of accumulated amortization of $575,345 and $607,723)		289,390			415,653
Other assets		1,292,657			1,273,041
	$	60,537,629		$	67,331,122
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$	1,497,839		$	2,202,753
Due to related parties		4,792,214			5,284,304
Mortgage loans		76,602,199			80,524,806
Accrued interest		5,833,343			5,428,098
Other liabilities		807,713			818,280
		89,533,308			94,258,241
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of distributions		26,588,807			28,758,986
Cumulative loss		(24,774,055	)		(26,881,391	)
		1,814,752			1,877,595
General partners and other limited partners
Capital contributions, net of distributions		(1,402,781	)		(438,848	)
Cumulative loss		(29,407,650	)		(28,365,866	)
		(30,810,431	)		(28,804,714	)
		(28,995,679	)		(26,927,119	)
	$	60,537,629		$	67,331,122

32

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

The combined statements of operations of the Local Partnerships for the years ended December 31, 2007, 2006 and 2005 are as follows:

	2007			2006			2005
REVENUE
Rental	$	11,813,515		$	12,260,770		$	11,969,192
Interest and other		384,392			398,638			681,809
TOTAL REVENUE		12,197,907			12,659,408			12,651,001
EXPENSES
Administrative		2,684,920			2,831,638			2,720,218
Utilities		1,785,113			1,784,166			1,581,055
Operating and maintenance		3,009,870			2,983,376			3,031,326
Taxes and insurance		1,232,301			1,283,973			1,269,953
Financial		2,260,472			2,590,917			2,677,462
Depreciation and amortization		3,937,524			4,160,276			4,123,905
TOTAL EXPENSES		14,910,200			15,634,346			15,403,919
NET LOSS	$	(2,712,293	)	$	(2,974,938	)	$	(2,752,918	)
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties III L.P.	$	(67,384	)	$	(97,326	)	$	(156,237	)
General partners and other limited partners, which includes $2,461,655, $2,668,471 and $2,360,295 of Partnership loss in excess of investment		(2,644,909	)		(2,877,612	)		(2,596,681	)
	$	(2,712,293	)	$	(2,974,938	)	$	(2,752,918	)

33

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

Investment activity with respect to each Local Partnership for the year ended March 30, 2008 is as follows:

Name of Local Partnership	Investment in Local Partnership balance as of March 30, 2007		Investments (voluntary advances) during the year ended March 30, 2008		Partnership's equity in loss for the year ended December 31, 2007			Adjustment to carrying value during the year ended March 30, 2008		Cash distributions received during the year ended March 30, 2008 (3)			Investment in Local Partnership balance as of March 30, 2008
April Gardens Apartments II Limited Partnership	$	—	$	—	$	—	(1)	$	—	$	—		$	—
Ashland Park Apartments, L.P.		—		—		—	(1)		—		—			—
Auburn Family, L.P.		—		—		—	(1)		—		—			—
Batesville Family, L.P.		—		—		—	(1)		—		—			—
Bay Springs Elderly, L.P.		—		—		—	(1)		—		—			—
Brisas del Mar Apartments Limited Partnership		—		—		—	(1)		—		—			—
Bruce Housing Associates, L.P.		—		—		—	(1)		—		—			—
Chestnut Park Associates, L.P.		—		—		—	(1)		—		—			—
Chowan Senior Manor Associates Limited Partnership		—		—		—	(1)		—		—			—
Christian Street Commons Associates		—		—		—	(1)		—		—			—
Country View Apartments		—		—		—	(1)		—		—			—
Desarrollos de Belen Limited Partnership		—		—		—	(1)		—		—			—
Desarrollos de Emaus Limited Partnership		—		—		—	(1)		—		—			—
Ellinwood Heights Apartments, L.P.		—		—		—	(1)		—		—			—
Fulton Street Houses Limited Partnership		—		—		—	(1)		—		—			—
Hayes Run Limited Partnership		—		—		—	(1)		—		—			—
Howard L. Miller Sallisaw Apartments II, L.P.		—		—		—	(1)		—		—			—
Hurlock Meadow Limited Partnership		—		—		—	(1)		—		—			—
Ivy Family, L.P.		—		—		—	(1)		—		—			—
Justin Associates		—		—		—	(1)		—		—			—
Lawrence Road Properties, Ltd.		—		—		—	(1)		—		—			—
Labelle Commons, Ltd.		—		—		—	(1)		—		—			—
Loma Del Norte Limited Partnership		—		—		—	(1)		—		—			—
Long Reach Associates Limited Partnership		—		—		—	(1)		—		—			—
Mirador del Toa Limited Partnership		—		—		—	(1)		—		—			—
Moore Haven Commons, Ltd.		—		—		—	(1)		—		—			—
NP-89 Limited Dividend Housing Association Limited Partnership		576,812		—		(52,205	)		—		(20,000	)		504,607
Nash Hill Associates, Limited Partnership		—		—		—	(1)		—		—			—
North Calhoun City, L.P.		—		—		—	(1)		—		—			—
Orange City Plaza, Limited Partnership		—		15,179		(15,179	)(2)		—		—			—
Puerta del Mar Limited Partnership		—		—		—	(1)		—		—			—
Purvis Heights Properties, L.P.		—		—		—	(1)		—		—			—
Queen Lane Investors		—		—		—	(1)		—		—			—
Somerset Manor, Ltd.		—		—		—	(1)		—		—			—
Sugar Cane Villas, Ltd.		—		—		—	(1)		—		—			—
Summerfield Apartments Limited Partnership		—		—		—	(1)		—		—			—
Sydney Engel Associates L.P.		—		—		—	(1)		—		—			—
Union Valley Associates Limited Partnership		—		—		—	(1)		—		—			—
Walnut Grove Family, L.P.		—		—		—	(1)		—		—			—
Waynesboro Apartments Limited Partnership		—		—		—	(1)		—		—			—
West Calhoun City, L.P.		—		—		—	(1)		—		—			—
Westminster Apartments Limited Partnership		—		—		—	(1)		—		—			—
	$	576,812	$	15,179	$	(67,384	)	$	—	$	(20,000	)	$	504,607

(1) Additional equity in loss of investment is not allocated to the Partnership until equity in income is earned or additional investment is made by the Partnership.

(2) The Partnership’s equity in loss of an investment in a Local Partnership is limited to the remaining investment balance.

(3) The total excludes $26,118 of distributions received classified as other income from local partnerships.

34

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

Investment activity with respect to each Local Partnership for the year ended March 30, 2007 is as follows:

Name of Local Partnership	Investment in Local Partnership balance as of  March 30,  2006		Investments (voluntary advances) during the year ended March 30, 2007		Partnership's equity in income (loss) for the year ended December 31, 2006			Adjustment to carrying value during  the year ended March 30, 2007		Cash distributions received during the year ended March 30, 2007 (3)			Investment in Local Partnership balance as of March 30, 2007
April Gardens Apartments II Limited Partnership	$	—	$	—	$	—	(1)	$	—	$	—		$	—
Ashland Park Apartments, L.P.		—		—		—	(1)		—		—			—
Auburn Family, L.P.		—		—		—	(1)		—		—			—
Batesville Family, L.P.		—		—		—	(1)		—		—			—
Bay Springs Elderly, L.P.		—		—		—	(1)		—		—			—
Brisas del Mar Apartments Limited Partnership		—		—		—	(1)		—		—			—
Bruce Housing Associates, L.P.		—		—		—	(1)		—		—			—
Carrington Limited Dividend Housing Association Limited Partnership		—		—		—	(1)		—		—			—
Chestnut Park Associates, L.P.		—		—		—	(1)		—		—			—
Chowan Senior Manor Associates Limited Partnership		—		—		—	(1)		—		—			—
Christian Street Commons Associates		—		—		—	(1)		—		—			—
Country View Apartments		—		—		—	(1)		—		—			—
Desarrollos de Belen Limited Partnership		—		—		—	(1)		—		—			—
Desarrollos de Emaus Limited Partnership		—		—		—	(1)		—		—			—
Ellinwood Heights Apartments, L.P.		—		—		—	(1)		—		—			—
Fulton Street Houses Limited Partnership		—		—		—	(1)		—		—			—
Hayes Run Limited Partnership		—		—		—	(1)		—		—			—
Howard L. Miller Sallisaw Apartments II, L.P.		—		—		—	(1)		—		—			—
Hurlock Meadow Limited Partnership		—		—		—	(1)		—		—			—
Ivy Family, L.P.		—		—		—	(1)		—		—			—
Justin Associates		—		—		—	(1)		—		—			—
Lawrence Road Properties, Ltd.		—		—		—	(1)		—		—			—
Labelle Commons, Ltd.		—		—		—	(1)		—		—			—
Loma Del Norte Limited Partnership		—		—		—	(1)		—		—			—
Long Reach Associates Limited Partnership		—		—		—	(1)		—		—			—
Mirador del Toa Limited Partnership		—		—		—	(1)		—		—			—
Moore Haven Commons, Ltd.		—		—		—	(1)		—		—			—
NP-89 Limited Dividend Housing Association Limited Partnership		578,827		—		7,985			—		(10,000	)		576,812
Nash Hill Associates, Limited Partnership		—		—		—	(1)		—		—			—
North Calhoun City, L.P.		—		—		—	(1)		—		—			—
Orange City Plaza, Limited Partnership		—		105,311		(105,311	)(2)		—		—			—
Puerta del Mar Limited Partnership		—		—		—	(1)		—		—			—
Purvis Heights Properties, L.P.		—		—		—	(1)		—		—			—
Queen Lane Investors		—		—		—	(1)		—		—			—
Somerset Manor, Ltd.		—		—		—	(1)		—		—			—
Sugar Cane Villas, Ltd.		—		—		—	(1)		—		—			—
Summerfield Apartments Limited Partnership		—		—		—	(1)		—		—			—
Sydney Engel Associates L.P.		—		—		—	(1)		—		—			—
Union Valley Associates Limited Partnership		—		—		—	(1)		—		—			—
Walnut Grove Family, L.P.		—		—		—	(1)		—		—			—
Waynesboro Apartments Limited Partnership		—		—		—	(1)		—		—			—
West Calhoun City, L.P.		—		—		—	(1)		—		—			—
Westminster Apartments Limited Partnership		—		—		—	(1)		—		—			—
	$	578,827	$	105,311	$	(97,326	)	$	—	$	(10,000	)	$	576,812

(1) Additional equity in loss of investment is not allocated to the Partnership until equity in income is earned or additional investment is made by the Partnership.

(2) The Partnership’s equity in loss of an investment in a Local Partnership is limited to the remaining investment balance.

(3) The total excludes $23,040 of distributions received classified as other income from local partnerships and $149,895 received in connection with disposal of limited partner interests/local partnership properties.

35

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

Property information for each Local Partnership as of December 31, 2007 is as follows:

Name of Local Partnership	Mortgage  loans payable		Land		Buildings and improvements		Accumulated depreciation
April Gardens Apartments II Limited Partnership	$	1,940,817	$	39,984	$	2,554,215	$	(1,710,647	)
Ashland Park Apartments, L.P.		1,007,252		50,160		1,276,935		(785,001	)
Auburn Family, L.P.		444,579		20,000		666,684		(306,420	)
Batesville Family, L.P.		1,402,915		52,000		1,882,647		(941,357	)
Bay Springs Elderly, L.P.		657,811		38,000		933,986		(451,636	)
Brisas del Mar Apartments Limited Partnership		2,571,899		100,280		3,488,197		(2,306,527	)
Bruce Housing Associates, L.P.		1,071,790		16,000		1,630,448		(915,851	)
Chestnut Park Associates, L.P.		4,461,175		781,700		8,693,011		(5,264,153	)
Chowan Senior Manor Associates Limited Partnership		1,203,845		86,101		1,578,917		(971,012	)
Christian Street Commons Associates		536,317		—		7,545		(2,455	)
Country View Apartments		910,551		35,698		1,289,750		(522,313	)
Desarrollos de Belen Limited Partnership		1,827,079		96,190		2,519,166		(1,290,216	)
Desarrollos de Emaus Limited Partnership		3,105,194		214,000		4,046,102		(1,992,899	)
Ellinwood Heights Apartments, L.P.		668,470		10,000		1,009,768		(421,737	)
Fulton Street Houses Limited Partnership		3,869,930		2		5,983,089		(3,454,435	)
Hayes Run Limited Partnership		1,385,839		85,060		1,694,620		(731,324	)
Howard L. Miller Sallisaw Apartments II, L.P.		599,282		39,000		802,984		(307,250	)
Hurlock Meadow Limited Partnership		1,232,292		49,525		1,639,842		(976,382	)
Ivy Family, L.P.		742,126		11,000		1,229,842		(675,888	)
Justin Associates		2,098,457		27,472		4,372,042		(2,548,404	)
LaBelle Commons, Ltd.		983,627		98,947		1,263,737		(684,544	)
Lawrence Road Properties, Ltd.		737,825		50,000		982,221		(485,093	)
Loma Del Norte Limited Partnership		1,398,854		84,874		1,956,291		(833,781	)
Long Reach Associates Limited Partnership		1,438,440		118,446		1,939,212		(867,365	)
Mirador del Toa Limited Partnership		1,822,423		105,000		2,374,461		(1,587,968	)
Moore Haven Commons, Ltd.		901,752		73,645		1,199,226		(750,140	)
NP-89 Limited Dividend Housing Association Limited Partnership		3,096,140		150,000		7,897,442		(4,639,591	)
Nash Hill Associates, Limited Partnership		1,427,370		123,876		1,781,667		(780,485	)
North Calhoun City, L.P.		455,102		12,000		670,388		(343,399	)
Orange City Plaza, Limited Partnership		382,467		53,904		1,051,852		(501,977	)
Puerta del Mar Limited Partnership		2,447,306		115,000		3,247,655		(2,119,365	)
Purvis Heights Properties, L.P.		1,116,418		47,000		1,589,723		(722,590	)
Queen Lane Investors		1,647,041		60,301		2,841,369		(1,729,552	)
Somerset Manor, Ltd.		873,408		53,383		1,130,381		(694,719	)
Sugar Cane Villas, Ltd.		3,217,284		58,500		4,093,772		(2,548,464	)
Summerfield Apartments Limited Partnership		1,488,833		195,411		2,790,670		(1,113,291	)
Sydney Engel Associates L.P.		15,460,803		284,305		20,286,434		(12,240,962	)
Union Valley Associates Limited Partnership		1,407,722		97,800		1,758,877		(756,799	)
Walnut Grove Family, L.P.		825,870		30,000		1,117,674		(582,642	)
Waynesboro Apartments Limited Partnership		1,439,826		76,000		1,794,917		(795,610	)
West Calhoun City, L.P.		688,096		18,000		1,182,875		(568,170	)
Westminster Apartments Limited Partnership		1,607,972		51,651		1,253,506		(1,074,703	)
	$	76,602,199	$	3,710,215	$	111,504,140	$	(62,997,117	)

36

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

Property information for each Local Partnership as of December 31, 2006 is as follows:

Name of Local Partnership	Mortgage  loans payable		Land		Buildings and improvements		Accumulated depreciation
April Gardens Apartments II Limited Partnership	$	1,950,265	$	39,984	$	2,509,656	$	(1,610,646	)
Ashland Park Apartments, L.P.		1,012,345		50,160		1,270,002		(734,965	)
Auburn Family, L.P.		448,594		20,000		592,581		(292,150	)
Batesville Family, L.P.		1,408,946		52,000		1,871,107		(893,995	)
Bay Springs Elderly, L.P.		660,822		38,000		933,986		(427,834	)
Brisas del Mar Apartments Limited Partnership		2,585,595		100,280		3,407,603		(2,161,762	)
Bruce Housing Associates, L.P.		1,077,661		16,000		1,609,710		(860,809	)
Carrington Limited Dividend Housing Association Limited Partnership		3,123,538		200,000		6,617,582		(3,988,180	)
Chestnut Park Associates, L.P.		4,574,324		781,700		8,700,511		(4,949,265	)
Chowan Senior Manor Associates Limited Partnership		1,212,836		86,101		1,530,162		(915,320	)
Christian Street Commons Associates		547,872		—		7,545		(2,181	)
Country View Apartments		914,962		35,698		1,280,230		(486,312	)
Desarrollos de Belen Limited Partnership		1,835,769		96,190		2,519,166		(1,207,344	)
Desarrollos de Emaus Limited Partnership		3,119,964		214,000		4,046,102		(1,858,909	)
Ellinwood Heights Apartments, L.P.		671,724		10,000		1,002,504		(386,866	)
Fulton Street Houses Limited Partnership		3,869,930		2		5,978,435		(3,229,747	)
Hayes Run Limited Partnership		1,392,485		85,060		1,686,732		(664,244	)
Howard L. Miller Sallisaw Apartments II, L.P.		602,039		39,000		737,883		(290,422	)
Hurlock Meadow Limited Partnership		1,238,575		49,525		1,633,277		(912,452	)
Ivy Family, L.P.		750,706		11,000		1,121,325		(639,336	)
Justin Associates		2,114,932		27,472		4,372,042		(2,389,118	)
LaBelle Commons, Ltd.		988,498		98,947		1,263,737		(636,268	)
Lawrence Road Properties, Ltd.		741,086		50,000		973,606		(459,758	)
Loma Del Norte Limited Partnership		1,405,307		84,874		1,931,832		(777,628	)
Long Reach Associates Limited Partnership		1,445,189		118,446		1,924,333		(817,226	)
Mirador del Toa Limited Partnership		1,832,459		105,000		2,364,101		(1,512,129	)
Moore Haven Commons, Ltd.		906,141		73,645		1,199,226		(707,695	)
NP-89 Limited Dividend Housing Association Limited Partnership		3,282,877		150,000		7,849,324		(4,347,376	)
Nash Hill Associates, Limited Partnership		1,434,317		123,876		1,762,654		(729,890	)
North Calhoun City, L.P.		460,664		12,000		670,388		(328,626	)
Orange City Plaza, Limited Partnership		393,027		53,904		1,051,852		(477,983	)
Puerta del Mar Limited Partnership		2,460,339		115,000		3,157,525		(1,984,119	)
Purvis Heights Properties, L.P.		1,121,965		47,000		1,571,653		(688,618	)
Queen Lane Investors		1,647,041		60,301		2,840,568		(1,622,323	)
Somerset Manor, Ltd.		877,468		53,383		1,126,905		(654,492	)
Sugar Cane Villas, Ltd.		3,232,530		58,500		4,093,772		(2,402,442	)
Summerfield Apartments Limited Partnership		1,532,337		195,411		2,775,519		(1,043,241	)
Sydney Engel Associates L.P.		15,649,510		284,305		20,263,692		(11,466,992	)
Union Valley Associates Limited Partnership		1,414,313		97,800		1,758,877		(713,845	)
Walnut Grove Family, L.P.		829,424		30,000		1,074,112		(553,737	)
Waynesboro Apartments Limited Partnership		1,447,008		76,000		1,794,917		(751,140	)
West Calhoun City, L.P.		701,450		18,000		1,104,158		(539,046	)
Westminster Apartments Limited Partnership		1,607,972		51,651		1,234,380		(997,799	)
	$	80,524,806	$	3,910,215	$	117,215,272	$	(63,114,230	)

37

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

5. Investment in Local Partnerships (continued)

The summary of property activity during the year ended December 31, 2007 is as follows:

	Balance as of December 31, 2006			Net change during the year ended December 31, 2007			Balance as of December 31, 2007
Land	$	3,910,215		$	(200,000	)	$	3,710,215
Buildings and improvements		117,215,272			(5,711,132	)		111,504,140
		121,125,487			(5,911,132	)		115,214,355
Accumulated depreciation		(63,114,230	)		117,113			(62,997,117	)
	$	58,011,257		$	(5,794,019	)	$	52,217,238

6. Transactions with General Partner and Affiliates

For the years ended March 30, 2008, 2007 and 2006 the Partnership paid and/or incurred the following amounts to the General Partner and/or affiliates in connection with services provided to the Partnership:

	2008				2007				2006
	Paid		Incurred		Paid		Incurred		Paid		Incurred
Management fees (see Note 8)	$	100,000	$	221,540	$	159,334	$	228,313	$	190,479	$	230,571
Administration fees (see Note 8)		15,517		221,540		15,553		228,313		132,578		230,571

For the years ended December 31, 2007, 2006 and 2005, the Local Partnerships paid and/or incurred the following amounts to the General Partner and/or affiliates in connection with services provided to the Local Partnerships:

	2007				2006				2005
	Paid		Incurred		Paid		Incurred		Paid		Incurred
Property management fees	$	42,128	$	40,010	$	42,371	$	40,010	$	39,220	$	40,010

38

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

7. Taxable Loss

A reconciliation of the financial statement net loss of the Partnership for the years ended March 30, 2008, 2007 and 2006 to the tax return net loss for the years ended December 31, 2007, 2006 and 2005 is as follows:

	2008			2007			2006
Financial statement net loss for the years ended March 30, 2008, 2007 and 2006	$	(551,682	)	$	(431,945	)	$	(620,078	)
Add (less) net transactions occurring between
January 1, 2005 and March 30, 2005		—			—			(90,683	)
January 1, 2006 and March 30, 2006		—			(124,512	)		124,512
January 1, 2007 and March 30, 2007		17,889			(17,889	)		—
January 1, 2008 and March 30, 2008		125,165			—			—
Adjusted financial statement net loss for the years ended December 31, 2007, 2006 and 2005		(408,628	)		(574,346	)		(586,249	)
Adjustment to management and administration fees pursuant to Internal Revenue Code Section 267		314,014			140,632			139,790
Differences arising from equity in loss of investment in local partnerships		(2,639,301	)		(2,538,962	)		(2,621,397	)
Other income from local partnerships		(18,776	)		(8,384	)		(39,332	)
Other differences		15,876			(18,185	)		(144	)
Tax return net loss for the years ended December 31, 2007, 2006 and 2005	$	(2,466,815	)	$	(2,999,245	)	$	(3,107,332	)

The differences between the investment in local partnerships for tax and financial reporting purposes as of December 31, 2007 and 2006 are as follows:

	2007			2006
Investment in local partnerships - financial reporting	$	504,607		$	576,812
Investment in local partnerships - tax		(23,584,237	)		(21,111,854	)
	$	24,088,844		$	21,688,666

Payable to general partner and affiliates in the accompanying balance sheets represents accrued management and administrative fees not deductible for tax purposes pursuant to Internal Revenue Code Section 267.

39

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

8. Commitments and Contingencies

Pursuant to the Partnership Agreement, the Partnership incurs an annual management fee (“Management Fee”) and an annual additional management fee (“Additional Management Fee”) payable to the General Partner for its services in connection with the management of the affairs of the Partnership. The annual Management Fee is equal to .14% of all proceeds as of December 31 of any year, invested or committed for investment in Local Partnerships plus all debts of the Local Partnerships related to the Properties ("Invested Assets"). The Partnership incurred a Management Fee of $155,078, $159,819, and $161,400 for the years ended March 30, 2008, 2007 and 2006, respectively. The annual Additional Management Fee is equal to .06% of Invested Assets. The Partnership incurred an Additional Management Fee of $66,462, $68,494 and $69,171 for the years ended March 30, 2008, 2007 and 2006, respectively. Such amounts are aggregated and reflected under the caption management fees - affiliate in the accompanying statements of operations. Unpaid Management Fees and Additional Management Fees in the cumulative amount of $1,355,978 and $1,234,438 are included in payable to general partner and affiliates in the accompanying balance sheets as of March 30, 2008 and 2007, respectively.

In addition, pursuant to the Partnership Agreement, the Partnership is authorized to contract for administrative services provided to the Partnership. From the inception of the Partnership through November 23, 1999, such administrative services were provided by ML Fund Administrators Inc. (“MLFA”), an affiliate of the Selling Agent, pursuant to an Administrative Services Agreement. MLFA resigned the performance of its basic services under the Administrative Services Agreement effective November 23, 1999, with certain transitional services continued through April 30, 2000. The General Partner transitioned the administrative services to an affiliate of the General Partner without any changes to the terms of the Administrative Services Agreement. Pursuant to such agreement, the Partnership incurs an annual administration fee (“Administration Fee”) and an annual additional administration fee (“Additional Administration Fee”) for administrative services provided to the Partnership. The Partnership incurred an Administration Fee of $155,078, $159,819, and $161,400 for the years ended March 30, 2008, 2007 and 2006, respectively. The annual Additional Administration Fee is equal to .06% of Invested Assets. The Partnership incurred an Additional Administration Fee of $66,462, $68,494 and $69,171 for the years ended March 30, 2008, 2007 and 2006, respectively. Such amounts are aggregated and reflected under the caption administration fees - affiliate in the accompanying statements of operations. Unpaid Administration Fees and Additional Administration Fees due to MLFA in the cumulative amount of $440,673 are included in accounts payable and accrued expenses in the accompanying balance sheets as of March 30, 2008 and 2007. Unpaid Administration Fees and Additional Administration Fees due to an affiliate of the General Partner in the cumulative amount of $1,365,317 and $1,159,294 are included in due to general partner and affiliates in the accompanying balance sheets as of March 30, 2008 and 2007, respectively.

The rents of the Properties, many of which receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8"), are subject to specific laws, regulations and agreements with federal and state agencies. The subsidy agreements expire at various times. Since October 1997, the United States Department of Housing and Urban Development (“HUD”) has issued a series of directives related to project based Section 8 contracts that define owners’ notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract. The Partnership cannot reasonably 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 including the Section 8 program. Such changes could adversely affect the future net operating income before debt service (“NOI”) and debt structure of any or all Local Partnerships currently receiving such subsidy or similar subsidies. Three Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines.

40

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

9. Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, "Disclosures about Fair Value of Financial Instruments." The estimated fair value amounts have been determined using available market information, assumptions, estimates and valuation methodologies.

Cash and Cash Equivalents

The carrying amount approximates fair value.

Investments in Bonds

Fair value is estimated based on market quotes provided by an independent service as of the balance sheet dates.

The estimated fair value of the Partnership's financial instruments as of March 30, 2008 and 2007 are disclosed elsewhere in the financial statements.

10. Quarterly Financial Information - Unaudited

The following is a summary of results of operations for each of the four quarters for the years indicated:

	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2008
Total revenue	$	26,521		$	17,450		$	16,344		$	22,506
Total expenses		(142,623	)		(133,311	)		(143,514	)		(147,671	)
Equity in income (loss) of investment in local partnerships		1,563			23,786			5,841			(98,574	)
Net loss		(114,539	)		(92,075	)		(121,329	)		(223,739	)
Net loss per unit of limited partnership interest		—			—			—			—

41

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - (Continued)

MARCH 30, 2008, 2007 AND 2006

10. Quarterly Financial Information - Unaudited (continued)

	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2007
Total revenue	$	39,254		$	29,554		$	11,411		$	14,865
Total expenses		(152,922	)		(134,314	)		(146,491	)		(145,871	)
Equity in income (loss) of investment in local partnerships		(53,754	)		(6,252	)		(60,585	)		23,265
Gain on disposal limited partner interests/local partnership properties		—			—			—			149,895
Net income (loss)		(167,422	)		(111,012	)		(195,665	)		42,154
Net income (loss) per unit of limited partnership interest		—			—			—			—

42

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. 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.

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 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 year ended March 30, 2008. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Registrant’s disclosure controls and procedures were effective as of March 30, 2008.

Item 9A(T). Management’s Annual Report on Internal Control over Financial Reporting

Registrant is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, Registrant conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management has concluded that Registrant’s internal control over financial reporting was effective as of March 30, 2008.

This Annual Report does not include an attestation report of Registrant’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by Registrant’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit Registrant to provide only management’s report in this Annual Report on Form 10-K.

There were no changes in Registrant’s internal control over financial reporting during the three months ended March 30, 2008 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

Item 9B. Other Information

None

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PART III

Item 10.Directors and Executive Officers of the Registrant

Registrant has no officers or directors. The General Partner manages Registrant's affairs and has general responsibility and authority in all matters affecting its business. The responsibilities of the General Partner are currently carried out by Richman Housing. The executive officers and director of Richman Housing are:

	Served in present
Name	capacity since1	Position held
Richard Paul Richman	September 21, 1989	Director
David A. Salzman	February 1, 2001	President
Neal Ludeke	September 21, 1989	Vice President and Treasurer
Gina K. Dodge	September 21, 1989	Secretary

¹Director holds office until his successor is elected and qualified. All officers serve at the pleasure of the Director.

Richard Paul Richman, age 60, is the sole Director of Richman Housing. Mr. Richman is the Chairman and a stockholder of Richman Group. Mr. Richman is involved in the syndication, development and management of residential property. Mr. Richman is also a director of Wilder Richman Resources Corp., an affiliate of Richman Housing and the general partner of Secured Income L.P., a director of Wilder Richman Historic Corporation, an affiliate of Richman Housing and the general partner of Wilder Richman Historic Properties II, L.P., a director of Richman Tax Credit Properties Inc., an affiliate of Richman Housing and the general partner of the general partner of American Tax Credit Properties L.P., a director of Richman Tax Credits Inc., an affiliate of Richman Housing and the general partner of the general partner of American Tax Credit Properties II L.P. and a director of Richman American Credit Corp., an affiliate of Richman Housing and the manager of American Tax Credit Trust, a Delaware statutory business trust.

David A. Salzman, age 47, is the President of Richman Housing and is a stockholder and the President of Richman Group. Mr. Salzman has been employed by Richman group since October 1986 and is responsible for the acquisition of residential real estate for syndication for Richman Group.

Neal Ludeke, age 50, is a Vice President and the Treasurer of Richman Housing. Mr. Ludeke, the Treasurer of Richman Group, is engaged primarily in the syndication, asset management and finance operations of Richman Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of Richman Asset Management, Inc. (“RAM”), an affiliate of Richman Housing. Mr. Ludeke's responsibilities in connection with RAM include various partnership management functions.

Gina K. Dodge, age 52, is the Secretary of Richman Housing. Ms. Dodge is a Vice President and the Secretary of Richman Group. As the Director of Investor Services, Ms. Dodge is responsible for communications with investors.

Registrant is not aware of any family relationship between its director and executive officers listed in this Item 10.

Registrant is not aware of the involvement in certain legal proceedings with respect to the director and executive officers listed in this Item 10.

Mr. Richman, the sole Director of Richman Housing, Mr. Ludeke and Charles Krafnick, Assistant Treasurer of Richman Housing, act as the audit committee of Registrant. Mr. Richman is deemed to be an audit committee financial expert and is not independent of Registrant.

The Board of Director of Richman Housing has adopted a code of ethics for senior financial officers of the Registrant, applicable to Registrant's principal executive officer, principal financial officer and comptroller or principal accounting officer, or persons performing similar functions. Registrant will provide to any person without charge a copy of such code of ethics upon written request to the General Partner at 340 Pemberwick Road, Greenwich, Connecticut 06831, Attention: Secretary.

44

Item 11.Executive Compensation

Registrant has no officers or directors. Registrant does not pay the officers or director of Richman Housing any compensation and did not pay any such compensation during the year ended March 30, 2008 or during the prior two fiscal years. During the year ended March 30, 2008 and during the prior two fiscal years, Richman Housing did not pay any compensation to any of its officers or its director.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

JJJ Fund, LLC and an affiliate, having the mailing address 7463 E. Beryl, Scottsdale, Arizona 85258 are the owners of 2,788 Units, representing approximately 7.8% of all such Units. As of December 31, 2007, no person or entity, other than JJJ Fund, LLC and an affiliate, was known by Registrant to be the beneficial owner of more than five percent of the Units. Richman Housing is wholly owned by Richard Paul Richman.

Item 13. Certain Relationships and Related Transactions

Transactions with Related Persons

The General Partner and certain of its affiliates are entitled to receive certain fees and reimbursement of expenses and have received/earned fees for services provided to Registrant as described in Notes 6 and 8 to the audited financial statements included in Item 8 - "Financial Statements and Supplementary Data" herein.

The net taxable loss generated by Registrant during the year ended December 31, 2007 allocated to the General Partner was $24,668. The net taxable loss generated by the General Partner during the year ended December 31, 2007 (from the allocation of Registrant discussed above) and allocated to Richman Housing was $19,939.

Review, Approval or Ratification of Transactions with Related Parties

Pursuant to the terms of the Partnership Agreement, Registrant has specific rights and limitations in conducting business with the General Partner and affiliates.  To date, Registrant has followed such provisions of the Partnership Agreement.  Registrant's unwritten policies for transacting business with related parties are to first refer to the Partnership Agreement in connection with conducting such business or making payments and then, if circumstances arise for which a new related party transaction is contemplated, present the proposed transaction to certain officers of the Richman Housing for review and approval.  If any matter in connection with such transaction might be unclear under the terms of the Partnership Agreement, such matter is presented to general or outside counsel for review prior to any such transaction being entered into by Registrant. 

Indebtedness of Management.

No officer or director of Richman Housing or any affiliate of the foregoing was indebted to Registrant at any time during the year ended March 30, 2008.

45

Item 14. Principal Accountant Fees and Services

Registrant’s independent registered public accounting firm billed Registrant the following fees for professional services rendered in the years ended March 30, 2008 and 2007:

	2008		2007
Audit Fees	$	50,250	$	50,000
Audit-Related Fees		—		—
Tax Fees	$	10,500	$	10,000
All Other Fees		—		—

Audit fees consist of fees for the annual audit and review of Registrant’s financial statements and assistance with and review of documents filed with the SEC. Tax fees generally represent fees for annual tax return preparation. There were no other accounting fees incurred by Registrant in fiscal 2008 and 2007.

The audit committee has adopted a set of pre-approval policies and procedures under which, pursuant to the requirements of the Sarbanes-Oxley Act of 2002, all audit and permitted non-audit services to be performed by the independent registered public accounting firm require pre-approval by the audit committee.

The audit committee approved all fiscal 2008 and 2007 principal accountant fees and services.

46

PART IV

Item 15.Exhibits and Financial Statement Schedules

(a) Financial Statements, Financial Statement Schedules and Exhibits

(1) Financial Statements

See Item 8 - "Financial Statements and Supplementary Data."

(2) Financial Statement Schedules

No financial statement schedules are included because of the absence of the conditions under which they are required or because the information is included in the financial statements or the notes thereto.

(3) Exhibits

	Exhibit	Incorporated by Reference to
10.1	April Gardens Apartments II Limited Partnership (A Delaware Limited Partnership) Amended and Restated Agreement of Limited Partnership	Exhibit 10.1 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.2	Ashland Park Apartments, L.P. Second Amended and Restated Agreement of Limited Partnership	Exhibit 10.2 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
10.3	Auburn Family, L.P. Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.1 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.4	Amended No. 2 to the Batesville Family, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.2 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.5	Batesville Family, L.P. Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership	Exhibit 10.2 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.6	Bay Springs Elderly, L.P. (A Mississippi Limited Partnership) Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.1 to Form 10-Q Report dated September 29, 1991 (File No. 0-19217)
10.7	Brisas del Mar Apartments Limited Partnership (A Delaware Limited Partnership) Amended and Restated Agreement of Limited Partnership	Exhibit 10.3 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.8	Amendment No. 1 to the Bruce Housing Associates, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.8 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)

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	Exhibit	Incorporated by Reference to
10.9	Amendment No. 2 to the Bruce Housing Associates, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.4 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.10	Bruce Housing Associates, L.P. Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership	Exhibit 10.3 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.11	Carrington Limited Dividend Housing Association Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.1 to Form 10-Q Report dated September 29, 1990 (File No. 33-31390)
10.12	Carrington Limited Dividend Housing Association Limited Partnership Second Amended and Restated Agreement of Limited Partnership	Exhibit 10.2 to Form 10-Q Report dated September 29, 1990 (File No. 33-31390)
10.13	Carrington Limited Dividend Housing Association Limited Partnership Amendment No. 1 to the Second Amended and Restated Agreement of Limited Partnership	Exhibit 10.5 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.14	Chestnut Park Associates, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.3 to Form 10-Q Report dated September 29, 1990 (File No. 33-31390)
10.15	Chowan Senior Manor Associates Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.15 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.16	Christian Street Commons Associates Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.16 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.17	Country View Apartments Second Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.17 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.18	Desarrollos de Belen Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.18 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.19	Desarrollos de Emaus Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.19 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.20	Ellinwood Heights Apartments, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.1 to Form 10-Q Report dated June 29, 1991 (File No. 0-19217)

48

	Exhibit	Incorporated by Reference to
10.21	Fulton Street Houses Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.21 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.22	Hayes Run Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.2 to Form 10-Q Report dated June 29, 1991 (File No. 0-19217)
10.23	Howard L. Miller Sallisaw Apartments II, L.P. Third Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.10 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
10.24	Hurlock Meadow Limited Partnership Amended and Restated Limited Partnership Agreement	Exhibit 10.24 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.25	Amendment No. 1 to the Ivy Family, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.6 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.26	Ivy Family, L.P. Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership	Exhibit 10.4 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.27	Justin Associates Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.7 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.28	LaBelle Commons, Ltd. Amended and Restated Agreement of Limited Partnership	Exhibit 10.13 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
10.29	LaBelle Commons, Ltd. Amendment No. 1 to Amended and Restated Agreement of Limited Partnership	Exhibit 10.29 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.30	Amendment No. 2 to the Lawrence Road Properties, Ltd. Amended and Restated Agreement of Limited Partnership	Exhibit 10.8 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.31	Lawrence Road Properties, Ltd. Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership	Exhibit 10.5 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.32	Loma Del Norte Limited Partnership Amended and Restated Limited Partnership Agreement	Exhibit 10.2 to Form 10-Q Report dated September 29, 1991 (File No. 0-19217)
10.33	Long Reach Associates Limited Partnership Sixth Amended and Restated Agreement of Limited Partnership	Exhibit 10.15 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)

49

	Exhibit	Incorporated by Reference to
10.34	Mirador del Toa Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.16 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
10.35	Amendment No. 1 to the Mirador del Toa Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.17 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
10.36	Moore Haven Commons, Ltd. Amended and Restated Agreement of Limited Partnership	Exhibit 10.9 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.37	NP-89 Limited Dividend Housing Association Limited Partnership Second Restated and Amended Agreement of Limited Partnership	Exhibit 10.3 to Form 10-Q Report dated June 29, 1991 (File No. 0-19217)
10.38	Nash Hill Associates, Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.37 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.39	North Calhoun City, L.P. (A Mississippi Limited Partnership) Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.3 to Form 10-Q Report dated September 29, 1991 (File No. 0-19217)
10.40	Orange City Plaza, Limited Partnership Amended and Restated Partnership Agreement	Exhibit 10.40 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.41	Puerta del Mar Limited Partnership (A Delaware Limited Partnership) Amended and Restated Agreement of Limited Partnership	Exhibit 10.10 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.42	Amendment No. 2 to the Purvis Heights Properties, L.P. Amended and Restated Agreement of Limited Partnership	Exhibit 10.11 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.43	Purvis Heights Properties, L.P. Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership	Exhibit 10.6 to Form 10-Q Report dated December 31, 1991 (File No. 0-19217)
10.44	Queen Lane Investors Amendment No. 1 to Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.12 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.45	Somerset Manor, Ltd. Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.13 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.46	Sugar Cane Villas, Ltd. Amended and Restated Agreement of Limited Partnership	Exhibit 10.23 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)

50

	Exhibit	Incorporated by Reference to
10.47	Summerfield Apartments Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.47 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
10.48	Amendment No.1 to the Summerfield Apartments Limited Partnership Amended and Restated Agreement of Limited Partnership	Exhibit 10.48 to Form 10-K Report dated March 30, 1999 (File No. 0-19217)
10.49	Sydney Engel Associates Second Amended and Restated Agreement of Limited Partnership	Exhibit 10.4 to Form 10-Q Report dated September 29, 1990 (File No. 33-31390)
10.50	First Amendment to Second Amended and Restated Agreement of Limited Partnership of Sydney Engel Associates	Exhibit 10.49 to Form 10-K Report dated March 30, 1997 (File No. 0-19217)
10.51	Second Amendment to Second Amended and Restated Agreement of Limited Partnership of Sydney Engel Associates L.P.	Exhibit 10.50 to Form 10-K Report dated March 30, 1997 (File No. 0-19217)
10.52	Third Amendment to Second Amended and Restated Agreement of Limited Partnership of Sydney Engel Associates L.P.	Exhibit 10.51 to Form 10-K Report dated March 30, 1997 (File No. 0-19217)
10.53	Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of Sydney Engel Associates L.P.	Exhibit 10.52 to Form 10-K Report dated March 30, 1997 (File No. 0-19217)
10.54	Union Valley Associates Limited Partnership Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.14 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.55	Walnut Grove Family, L.P. (A Mississippi Limited Partnership) Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.4 to Form 10-Q Report dated September 29, 1991 (File No. 0-19217)
10.56	Waynesboro Apartments Limited Partnership Amended and Restated Agreement and Certificate of Limited Partnership	Exhibit 10.15 to Form 10-Q Report dated December 30, 1990 (File No. 33-31390)
10.57	West Calhoun City, L.P. (A Mississippi Limited Partnership) Amended and Restated Limited Partnership Agreement and Certificate of Limited Partnership	Exhibit 10.5 to Form 10-Q Report dated September 29, 1991 (File No. 0-19217)
10.58	Westminster Apartments Limited Partnership Second Amended and Restated Agreement of Limited Partnership	Exhibit 10.53 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)

51

	Exhibit	Incorporated by Reference to
*31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
*31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
*32.1	Section 1350 Certification of Chief Executive Officer.
*32.2	Section 1350 Certification of Chief Financial Officer.
99.1	Pages 20 through 31, 44 through 71 and 78 through 80 of Prospectus filed pursuant to Rule 424(b)(3) under Securities Act of 1933	Exhibit 28.0 to Form 10-K Report dated March 30, 1990 (File No. 33-31390)
99.2	Pages 14 through 19 of Prospectus filed pursuant to Rule 424(b)(3) under Securities Act of 1933	Exhibit 28.1 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
99.3	Supplement No. 1 dated June 6, 1990 to Prospectus	Exhibit 28.2 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
99.4	Supplement No. 2 dated November 21, 1990 to Prospectus	Exhibit 28.3 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
99.5	Supplement No. 3 dated December 20, 1990 to Prospectus	Exhibit 28.4 to Form 10-K Report dated March 30, 1991 (File No. 33-31390)
99.6	Supplement No. 4 dated October 30, 1991 to Prospectus	Exhibit 28.5 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
99.7	Supplement No. 5 dated December 26, 1991 to Prospectus	Exhibit 28.6 to Form 10-K Report dated March 30, 1992 (File No. 33-31390)
99.8	Supplement No. 6 dated January 15, 1992 to Prospectus	Exhibit 28.7 to Form 10-K Report dated March 30, 1990 (File No. 33-31390)
99.9	Report of Independent Registered Public Accounting Firm of Carrington L.D.H.A. Limited Partnership as of and for the year ended December 31, 2004	Exhibit 99.9 to Form 10-K Report dated March 30, 2005 (File No. 33-31390)
99.10	Independent Auditor’s Report of Ellinwood Heights Apartments, L.P. as of and for the years ended December 31, 2004 and 2003	Exhibit 99.10 to Form 10-K Report dated March 30, 2005 (File No. 33-31390)

52

	Exhibit	Incorporated by Reference to
99.11	Independent Auditors’ Report of NP-89 Limited Dividend Housing Association Limited Partnership as of and for the year ended December 31, 2004	Exhibit 99.11 to Form 10-K Report dated March 30, 2005 (File No. 33-31390)
99.12	Audited Financial Statements of NP-89 Limited Dividend Housing Association Limited Partnership as of and for the year ended December 31, 2005	Exhibit 99.12 to Form 10-K Report dated March 30, 2006 (File No. 33-31390)
99.13	Report of Independent Registered Public Accounting Firm of NP-89 Limited Dividend Housing Association Limited Partnership as of and for the year ended December 31, 2005	Exhibit 99.13 to Form 10-K Report dated March 30, 2006 (File No. 33-31390)
99.14	Audited Financial Statements of NP-89 Limited Dividend Housing Association Limited Partnership as of and for the year ended December 31, 2006	Exhibit 99.14 to Form 10-K Report dated March 30, 2007 (File No. 33-31390)
*99.15	Report of Independent Registered Public Accounting Firm of NP-89 Limited Dividend Housing Association Limited Partnership as of and for the year ended December 31, 2007

*Filed herewith.

(b) Exhibits

See (a)(3) above.

(c) Financial Statement Schedules

See (a)(2) above.

53

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has 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: July 10, 2008	/s/ David Salzman
	David Salzman
	Chief Executive Officer
Dated: July 10, 2008	/s/ Neal Ludeke
	Neal Ludeke
	Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/ David Salzman	Chief Executive Officer of the general	July 10, 2008
(David Salzman)	partner of the General Partner
/s/ Neal Ludeke	Chief Financial Officer of the general	July 10, 2008
(Neal Ludeke)	partner of the General Partner
/s/ Richard Paul Richman	Director of the general partner of the	July 10, 2008
(Richard Paul Richman)	General Partner

54