UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------

                                    FORM 10-Q


(Mark One)

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

For the quarterly period ended December 30, 1999

                                       OR

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

For the transition period from ____________ to ____________

                         Commission file number: 0-24600

                  American Tax Credit Trust Properties III L.P.
             (Exact name of Registrant as specified in its charter)

         Delaware                                             13-3545006
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)

Richman American Credit Corp.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut                                       06830
---------------------------------------                     ---------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:  (203) 869-0900

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required to file such reports),  and (2) has been subject to filing requirements
for the past 90 days.

Yes |X| No |_|.

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                         PART I - FINANCIAL INFORMATION

      Item 1. Financial Statements


      Table of Contents                                                     Page
      -----------------                                                     ----


      Balance Sheets..........................................................3

      Statements of Operations................................................4

      Statements of Cash Flows................................................5

      Notes to Financial Statements...........................................7


                                       2
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         December 30,     March 30,
                                                                 Notes       1999           1999
                                                                 -----   -----------    -----------
              ASSETS
<S>                                                                      <C>            <C>
Cash and cash equivalents                                                $   762,358    $   567,613
Investments in bonds available-for-sale                             2      2,486,975      2,890,010
Investment in local partnerships                                    3      4,828,881      6,032,392
Interest receivable                                                           30,138         21,531
                                                                         -----------    -----------
                                                                         $ 8,108,352    $ 9,511,546
                                                                         ===========    ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                             4    $ 1,159,245    $ 1,105,703
  Payable to general partner                                               1,186,074      1,061,185
  Other                                                                        6,950         11,700
                                                                         -----------    -----------
                                                                           2,352,269      2,178,588
                                                                         -----------    -----------
Commitment and contingencies                                        4

Partners' equity (deficit)

  General partner                                                           (256,361)      (242,419)
  Limited partners (35,883 units of limited partnership
    interest outstanding)                                                  6,149,939      7,530,193
  Accumulated other comprehensive income (loss), net                2       (137,495)        45,184
                                                                         -----------    -----------
                                                                           5,756,083      7,332,958
                                                                         -----------    -----------
                                                                         $ 8,108,352    $ 9,511,546
                                                                         ===========    ===========
</TABLE>

                       See Notes to Financial Statements.


                                       3
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Three Months   Nine Months    Three Months   Nine Months
                                                          Ended         Ended          Ended          Ended
                                                      December 30,   December 30,   December 30,   December 30,
                                              Notes       1999          1999           1998           1998
                                              -----   -----------    -----------    -----------    -----------
REVENUE
<S>                                                   <C>            <C>            <C>            <C>
Interest                                              $    55,858    $   168,467    $    61,700    $   185,232
Other income from local partnerships             3          6,459         13,218                         5,752
                                                      -----------    -----------    -----------    -----------
TOTAL REVENUE                                              62,317        181,685         61,700        190,984
                                                      -----------    -----------    -----------    -----------
EXPENSES

Administration fees                              4         57,646        172,931         57,646        172,931
Management fees                                            57,646        172,931         57,646        172,931
Professional fees                                           5,557         26,228         13,251         34,600
Printing, postage and other                                 6,330         16,188          8,807         22,704
                                                      -----------    -----------    -----------    -----------
TOTAL EXPENSES                                            127,179        388,278        137,350        403,166
                                                      -----------    -----------    -----------    -----------
Loss from operations                                      (64,862)      (206,593)       (75,650)      (212,182)

Equity in loss of investment in
  local partnerships                             3       (313,806)    (1,187,603)      (432,042)    (1,322,113)
                                                      -----------    -----------    -----------    -----------


NET LOSS                                                 (378,668)    (1,394,196)      (507,692)    (1,534,295)

Other comprehensive income (loss)                2        (65,320)      (182,679)       (50,421)       101,672
                                                      -----------    -----------    -----------    -----------
COMPREHENSIVE LOSS                                    $  (443,988)   $(1,576,875)   $  (558,113)   $(1,432,623)
                                                      ===========    ===========    ===========    ===========
NET LOSS ATTRIBUTABLE TO

  General partner                                     $    (3,787)   $   (13,942)   $    (5,077)   $   (15,343)
  Limited partners                                       (374,881)    (1,380,254)      (502,615)    (1,518,952)
                                                      -----------    -----------    -----------    -----------
                                                      $  (378,668)   $(1,394,196)   $  (507,692)   $(1,534,295)
                                                      ===========    ===========    ===========    ===========
NET LOSS per unit of limited
  partnership interest (35,883
  units of limited partnership
  interest)                                           $    (10.45)   $    (38.47)   $    (14.01)   $    (42.33)
                                                      ===========    ===========    ===========    ===========
</TABLE>

                       See Notes to Financial Statements.


                                       4
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED DECEMBER 30, 1999 AND 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 1999         1998
                                                              ---------    ---------
<S>                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                             $ 105,212    $ 121,225

Cash used for local partnerships for deferred expenses           (4,750)      (4,750)
Cash paid for
    administration fees                                         (85,586)     (75,000)
    management fees                                             (75,000)     (75,000)
    professional fees                                           (40,233)     (44,225)
    printing, postage and other expenses                         (9,028)     (23,708)
                                                              ---------    ---------
Net cash used in operating activities                          (109,385)    (101,458)
                                                              ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions and other income from local partnerships      29,126       26,389
Maturity/redemption of bonds                                    275,004      142,918
                                                              ---------    ---------
Net cash provided by investing activities                       304,130      169,307
                                                              ---------    ---------
Net increase in cash and cash equivalents                       194,745       67,849

Cash and cash equivalents at beginning of period                567,613      419,372
                                                              ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                    $ 762,358    $ 487,221
                                                              =========    =========

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain (loss) on investments in bonds
  available-for-sale, net                                     $(182,679)   $ 101,672
                                                              =========    =========
</TABLE>

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

                       See Notes to Financial Statements.


                                       5
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                  NINE MONTHS ENDED DECEMBER 30, 1999 AND 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 1999             1998
                                                              -----------    -----------
<S>                                                           <C>            <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
  ACTIVITIES

Net loss                                                      $(1,394,196)   $(1,534,295)

Adjustments to reconcile net loss to net cash used in
  operating activities

  Equity in loss of investment in local partnerships            1,187,603      1,322,113
  Distributions from local partnerships classified as other       (13,218)        (5,752)
    income
  Loss on maturity/redemption of investments in bonds                 677
  Amortization of net premium on investments in bonds              10,517          9,919
  Accretion of zero coupon bonds                                  (65,165)       (65,165)
  Increase in interest receivable                                  (8,607)        (9,438)
  Increase in accounts payable and accrued expenses                53,542         87,302
  Increase in payable to general partner                          124,889         97,931
  Decrease in other liabilities                                    (4,750)        (4,750)
                                                              -----------    -----------
NET CASH USED IN OPERATING ACTIVITIES                         $  (109,385)   $  (101,458)
                                                              ===========    ===========
</TABLE>

                       See Notes to Financial Statements.


                                       6
<PAGE>

                    AMERICAN TAX CREDIT PROPERTIES III, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 30, 1999
                                   (UNAUDITED)

1.  Basis of Presentation

    The  accompanying  unaudited  financial  statements  have been  prepared  in
    accordance  with  generally  accepted  accounting   principles  for  interim
    financial  information.  They do not include all  information  and footnotes
    required by generally accepted accounting  principles for complete financial
    statements.  The results of  operations  are impacted  significantly  by the
    combined results of operations of the Local Partnerships, which are provided
    by the Local  Partnerships  on an unaudited  basis during  interim  periods.
    Accordingly,  the  accompanying  financial  statements are dependent on such
    unaudited information.  In the opinion of the General Partner, the financial
    statements include all adjustments necessary to present fairly the financial
    position as of December  30,  1999 and the  results of  operations  and cash
    flows for the interim  periods  presented.  All  adjustments are of a normal
    recurring  nature.  The results of  operations  for the three and nine month
    periods  ended  December  30,  1999 are not  necessarily  indicative  of the
    results that may be expected for the entire year.

2.  Investments in Bonds Available-For-Sale

    As of December 30, 1999, certain information concerning investments in bonds
    available-for-sale is as follows:

<TABLE>
<CAPTION>
                                                        Gross          Gross
                                         Amortized    unrealized     unrealized     Estimated
Description and maturity                    cost        gains          losses       fair value
------------------------               -----------   -----------    -----------    -----------
<S>                                    <C>           <C>            <C>            <C>
Corporate debt securities
  Within one year                      $    75,416   $      --      $       (51)   $    75,365
  After one year through five years        455,994           745         (1,995)       454,744
  After five years through ten years       697,509         2,181        (37,587)       662,103
  After ten years                          229,432          --          (10,307)       219,125
                                         1,458,351         2,926        (49,940)     1,411,337
                                       -----------   -----------    -----------    -----------
U.S. Treasury debt securities
  After five years through ten years     1,166,119          --          (90,481)     1,075,638
                                       -----------   -----------    -----------    -----------
                                       $ 2,624,470   $     2,926    $  (140,421)   $ 2,486,975
                                       ===========   ===========    ===========    ===========
</TABLE>


                                       7
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1999
                                   (UNAUDITED)

3.  Investment in Local Partnerships

    The  Partnership  owns limited  partnership  interests in forty-three  Local
    Partnerships  representing capital  contributions in the aggregate amount of
    $29,264,476,  all of which have been paid.  As of September  30,  1999,  the
    Local   Partnerships  have  outstanding   mortgage  loans  payable  totaling
    approximately  $85,934,000  and  accrued  interest  payable  on  such  loans
    totaling approximately  $2,725,000,  which are secured by security interests
    and liens common to mortgage loans on the Local  Partnerships' real property
    and other assets.

    For the nine  months  ended  December  30,  1999,  the  investment  in local
    partnerships activity consists of the following:

        Investment in local partnerships as of March 30, 1999      $ 6,032,392

        Equity in loss of investment in local partnerships          (1,187,603)

        Cash distributions received from Local Partnerships            (29,126)

        Cash distributions from Local Partnerships classified as
          other  income                                                 13,218
                                                                   -----------
        Investment in local partnerships as of December 30, 1999   $ 4,828,881
                                                                   ===========



    * Equity in loss of  investment  in local  partnerships  is  limited  to the
      Partnership's investment balance in each Local Partnership;  any excess is
      applied to other  partners'  capital in any such  Local  Partnership.  The
      amount of such  excess  losses  applied  to other  partners'  capital  was
      $1,080,602  for the nine months ended  September  30, 1999 as reflected in
      the combined statement of operations of the Local  Partnerships  reflected
      herein Note 3.

    The  combined  unaudited  balance  sheets  of the Local  Partnerships  as of
    September  30,  1999  and  December  31,  1998  and the  combined  unaudited
    statements of operations  of the Local  Partnerships  for the three and nine
    month periods ended September 30, 1999 and 1998 are reflected on pages 9 and
    10, respectively.


                                       8
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1999
                                   (UNAUDITED)

3.  Investment in Local Partnerships (continued)

    The combined  balance sheets of the Local  Partnerships  as of September 30,
    1999 and December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                                    September 30,    December 31,
                                                                        1999            1998
                                                                   ------------    ------------
   ASSETS
<S>                                                                <C>             <C>
Cash and cash equivalents                                          $  1,581,554    $  1,396,493
Rents receivable                                                        418,120         429,688
Capital contributions receivable                                         84,433
Escrow deposits and reserves                                          4,764,552       4,657,419
Land                                                                  3,910,215       3,910,215
Buildings and improvements (net of accumulated depreciation of
  $34,066,334 and $31,057,575)                                       79,090,774      82,003,262

Intangible assets (net of accumulated amortization of $653,224
  and $618,890)                                                         682,390         716,724

Other                                                                   871,219         804,785
                                                                   ------------    ------------
                                                                   $ 91,318,824    $ 94,003,019
                                                                   ============    ============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                            $    775,771    $    619,342
  Due to related parties                                              4,928,537       5,154,179
  Mortgage loans                                                     85,934,150      86,358,980
  Notes payable                                                          21,297          26,990
  Accrued interest                                                    2,724,945       2,420,323
  Other                                                                 622,769         613,520
                                                                   ------------    ------------
                                                                     95,007,469      95,193,334
                                                                   ------------    ------------
Partners' equity (deficit)

  American Tax Credit Properties III L.P.
    Capital contributions, net of distributions (includes
      receivable of $84,433 as of December 31, 1998)                 28,972,778      29,004,177
    Cumulative loss                                                 (24,164,069)    (22,976,466)
                                                                   ------------    ------------
                                                                      4,808,709       6,027,711
                                                                   ------------    ------------
  General partners and other limited partners, including ATCP II
    Capital contributions, net of distributions                        (197,587)       (177,871)
    Cumulative loss                                                  (8,299,767)     (7,040,155)
                                                                   ------------    ------------
                                                                     (8,497,354)     (7,218,026)
                                                                   ------------    ------------
                                                                     (3,688,645)     (1,190,315)
                                                                   ------------    ------------
                                                                   $ 91,318,824    $ 94,003,019
                                                                   ============    ============
</TABLE>


                                       9
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1999
                                   (UNAUDITED)


3.  Investment in Local Partnerships (continued)

    The combined  statements  of operations  of the Local  Partnerships  for the
    three  and nine  month  periods  ended  September  30,  1999 and 1998 are as
    follows:

<TABLE>
<CAPTION>
                                            Three Months   Nine Months   Three Months  Nine Months
                                               Ended          Ended         Ended         Ended
                                             September      September     September     September
                                                30,            30,           30,           30,
                                                1999          1999           1998          1998
                                           ------------    ------------    ------------    ------------
   REVENUE
<S>                                        <C>             <C>             <C>             <C>
Rental                                     $  2,670,422    $  8,012,199    $  2,667,212    $  7,932,978

Interest and other                              177,737         334,098          89,304         253,270
                                           ------------    ------------    ------------    ------------
Total Revenue                                 2,848,159       8,346,297       2,756,516       8,186,248
                                           ------------    ------------    ------------    ------------
EXPENSES

Administrative                                  528,353       1,564,224         534,207       1,527,912
Utilities                                       279,100         829,011         172,918         686,562
Operating, maintenance and other                616,049       1,938,638         770,033       1,913,861
Taxes and insurance                             314,206         942,492         317,192         965,138
Financial (including amortization of
  $11,440, $34,334, $11,868 and $36,445)        831,491       2,510,388         842,157       2,556,137

Depreciation                                  1,002,250       3,008,759       1,005,677       3,012,986
                                           ------------    ------------    ------------    ------------
Total Expenses                                3,571,449      10,793,512       3,642,184      10,662,596
                                           ------------    ------------    ------------    ------------
NET LOSS                                   $   (723,290)   $ (2,447,215)   $   (885,668)   $ (2,476,348)
                                           ============    ============    ============    ============

NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties III L.P.    $   (313,806)   $ (1,187,603)   $   (432,042)   $ (1,322,113)
General partners and other limited
  partners, including ATCP II, which
  includes $352,670, $1,080,602,
  $380,527 and $972,612 of Partnership
  loss in excess of investment                 (409,484)     (1,259,612)       (453,626)     (1,154,235)
                                           ------------    ------------    ------------    ------------
                                           $   (723,290)   $ (2,447,215)   $   (885,668)   $ (2,476,348)
                                           ============    ============    ============    ============
</TABLE>


The combined results of operations of the Local Partnerships for the three and
nine month periods ended September 30, 1999 are not necessarily indicative of
the results that may be expected for an entire operating period.


                                       10
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1999
                                   (UNAUDITED)

4.    Administration Fees

      Pursuant to the  Partnership  Agreement,  the Partnership is authorized to
      contract for  administrative  services provided to the Partnership.  Since
      the inception of the Partnership,  such administrative  services have been
      provided  by  ML  Fund  Administrators  Inc.  ("MLFA"),   pursuant  to  an
      Administrative  Services  Agreement.  MLFA discontinued the performance of
      its basic services under the Administrative  Services Agreement  effective
      November 23, 1999 with certain transitional services to be continued until
      April 30, 2000. The General Partner has  transitioned  the  administrative
      services to an affiliate of the General Partner without any changes to the
      terms of the  Administrative  Services  Agreement.  Under the terms of the
      Partnership   Agreement,   the  Partnership  currently  incurs  an  annual
      Administration Fee and an annual Additional  Administration Fee of 161,400
      69,171, respectively.

5.    Additional Information

      Additional  information,  including the audited  March 30, 1999  Financial
      Statements  and the  Organization,  Purpose  and  Summary  of  Significant
      Accounting  Policies,  is included in the  Partnership's  Annual Report on
      Form  10-K for the  fiscal  year  ended  March  30,  1999 on file with the
      Securities and Exchange Commission.


                                       11
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Material Changes in Financial Condition

As  of  December  30,  1999,  American  Tax  Credit  Properties  III  L.P.  (the
"Registrant") has not experienced a significant change in financial condition as
compared  to March 30,  1999.  Principal  changes  in assets  are  comprised  of
periodic  transactions  and  adjustments  and  anticipated  equity  in loss from
operations  of the  local  partnerships  (the  "Local  Partnerships")  which own
low-income  multifamily  residential  complexes (the "Properties") which qualify
for the  low-income  tax credit in  accordance  with  Section 42 of the Internal
Revenue  Code (the  "Low-income  Tax  Credit").  During  the nine  months  ended
December  30,   1999,   Registrant   received   cash  from   interest   revenue,
maturity/redemption  of bonds and  distributions  from  Local  Partnerships  and
utilized cash for operating expenses.  Cash and cash equivalents and investments
in  bonds  available-for-sale  decreased,  in the  aggregate,  by  approximately
$208,000  during the nine months ended  December 30, 1999 (which  includes a net
unrealized  loss  on  investments  in  bonds  of  approximately   $183,000,  the
amortization of net premium on investments in bonds of approximately $11,000 and
the accretion of zero coupon bonds of  approximately  $65,000).  Notwithstanding
circumstances that may arise in connection with the Properties,  Registrant does
not expect to realize  significant  gains or losses on its investments in bonds,
if any.  During the nine months ended December 30, 1999, the investment in Local
Partnerships  decreased  as  a  result  of  Registrant's  equity  in  the  Local
Partnerships'  net  loss  for  the  nine  months  ended  September  30,  1999 of
$1,187,603 and cash  distributions  received from Local  Partnerships of $15,908
(exclusive of  distributions  from Local  Partnerships of $13,218  classified as
other income from local  partnerships).  Accounts  payable and accrued  expenses
includes  deferred  administration  fees of  $1,121,572  and  payable to general
partner  represents   deferred   management  and  administration   fees  in  the
accompanying balance sheet as of December 30, 1999.

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,  which  includes  capital  contributions  payable,  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 3 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. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  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 three months ended  December 30, 1999 and 1998
resulted in net losses of $378,668 and $507,692,  respectively.  The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local partnerships of approximately  $118,000.  Other  comprehensive loss for
the three months ended December 30, 1999 and 1998 resulted from a net unrealized
loss  on  investments  in  bonds  available-for-sale  of  $65,320  and  $50,421,
respectively.

The Local Partnerships' net loss of approximately  $723,000 for the three months
ended  September  30,  1999 was  attributable  to rental  and other  revenue  of
approximately $2,848,000,  exceeded by operating and interest expense (including
interest on non-mandatory  debt) of approximately  $2,557,000 and  approximately
$1,014,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $886,000 for the three months ended September 30, 1998 was
attributable to rental and other revenue of approximately  $2,757,000,  exceeded
by operating and interest expense (including  interest on non-mandatory debt) of
approximately  $2,625,000  and  approximately  $1,018,000  of  depreciation  and
amortization  expense.  The results of operations of the Local  Partnerships for
the three months ended September 30, 1999 are not necessarily  indicative of the
results that may be expected in future periods.


                                       12
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Registrant's  operations  for the nine months  ended  December 30, 1999 and 1998
resulted in net losses of $1,394,196 and $1,534,295,  respectively. The decrease
in net  loss is  primarily  attributable  to a  decrease  in  equity  in loss of
investment in local partnerships of approximately $135,000.  Other comprehensive
income (loss) for the nine months ended December 30, 1999 and 1998 resulted from
a net  unrealized  gain (loss) on  investments  in bonds  available-for-sale  of
($182,679) and $101,672, respectively.

The Local Partnerships' net loss of approximately $2,447,000 for the nine months
ended  September  30,  1999 was  attributable  to rental  and other  revenue  of
approximately $8,346,000,  exceeded by operating and interest expense (including
interest on non-mandatory  debt) of approximately  $7,750,000 and  approximately
$3,043,000 of depreciation and amortization expense. The Local Partnerships' net
loss of  approximately  $2,476,000 for the nine months ended  September 30, 1998
was  attributable  to rental  and other  revenue  of  approximately  $8,186,000,
exceeded by operating and interest expense (including  interest on non-mandatory
debt) of approximately  $7,613,000 and approximately  $3,049,000 of depreciation
and amortization  expense.  The results of operations of the Local  Partnerships
for the nine months ended September 30, 1999 are not  necessarily  indicative of
the results that may be expected in future periods.

Local Partnership Matters

Registrant's  primary objective is to provide  Low-income Tax Credits to limited
partners  generally over a ten year period.  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,
1998,  none of the Local  Partnerships  have  suffered an event of  recapture of
Low-income Tax Credits.

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  during and after the  Compliance  Periods of the Local  Partnerships.  In
October 1997,  Congress passed the Multifamily  Assisted  Housing and Reform and
Affordability  Act,  whereby the United  States  Department of Housing and Urban
Development  ("HUD") was given the  authority  to renew  certain  project  based
Section 8 contracts  expiring during HUD's fiscal year 1998,  where requested by
an owner,  for an  additional  one year term  generally at or below current rent
levels,  subject to certain guidelines.  In October 1998, HUD issued a directive
related to project based Section 8 contracts  expiring  during HUD's fiscal year
1999 which defined  owners'  notification  responsibilities,  advised  owners of
project  based  Section 8 properties  of what their  options are  regarding  the
renewal of Section 8  contracts,  provided  guidance and  procedures  to owners,
management agents,  contract  administrators and HUD staff on renewing Section 8
contracts,  provided guidance on setting renewal rents and handling renewal rent
decreases  and provided the  requirements  and  procedures  for  opting-out of a
Section 8 project based contract.  In January 2000, HUD issued a new notice that
provides updated  guidance for those project based Section 8 contracts  expiring
during HUD's fiscal year 2000.  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 and debt structure of any
or all Local Partnerships currently receiving such subsidy or similar subsidies.
One Local  Partnership's  Section 8  contract  is  currently  subject  to annual
year-to-year renewals.


                                       13
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

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").  In the event rents are not sufficient to cover operating
expenses, Mandatory Debt Service requirements and other charges, certain general
partners of the Local  Partnerships (the "Local General Partners") are obligated
to provide advances to cover deficits for a certain period of time up to certain
amounts (the "Deficit  Guarantee").  A Local General  Partner's  funding of such
Deficit  Guarantee  is  dependent  on its  liquidity  or  ability  to borrow the
required funds.  During the nine months ended  September 30, 1999,  revenue from
operations of the Local  Partnerships  have generally  been  sufficient to cover
operating  expenses and Mandatory Debt Service.  Substantially  all of the Local
Partnerships are effectively operating above or near 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
below  break even  operations  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 to advance funds
to cover  operating  deficits  through 2009.  Westminster  reported an operating
deficit of  approximately  $49,000 for the nine months ended September 30, 1999.
In addition,  as of September 30, 1999,  Westminster is ten months in arrears on
its  mortgage,  and  fourteen  to sixteen  months in arrears on its  replacement
reserve  and  escrow  requirements.  The Local  General  Partner  is  conducting
discussions  with the lender,  which has acknowledged the arrearages but has not
declared a default.  Current  proposals  include the  potential  utilization  of
replacement  reserves to reduce the  arrearages.  There can be no assurance that
the Local  General  Partner  will be  successful  in its  negotiations  with the
lender.  Registrant's  investment  balance in Westminster,  after the cumulative
equity losses, became zero during the year ended March 30, 1999. Of Registrant's
total  annual  Low-income  Tax  Credits,  approximately  4%  is  allocated  from
Westminster.

Fulton  Street Houses  Limited  Partnership  ("Fulton  Street") has an escrow of
approximately $296,000 as of September 30, 1999 to cover operating deficits, and
there are no  Mandatory  Debt  Service  payments or real estate  taxes  required
during the Compliance  Period.  Fulton Street  reported an operating  deficit of
approximately  $30,000  for  the  nine  months  ended  September  30,  1999.  Of
Registrant's total annual Low-income Tax Credits,  approximately 8% is allocated
from Fulton Street.

Year 2000 Compliance

The   inability   of   computers,   software  and  other   equipment   utilizing
microprocessors  to recognize and properly process data fields  containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000  unfolds,  certain  systems  may be unable to  accurately  process
certain  data-based  information.  Many businesses may need to upgrade  existing
systems or purchase new ones to correct the Y2K issue.  Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance.  However,  there can be no
assurance  that the  systems  of other  entities  on  which  Registrant  relies,
including the Local  Partnerships which report to Registrant on a periodic basis
for the purpose of Registrant's reporting to its investors, will be sufficiently
converted.  To date,  Registrant is not aware of any problems caused by Y2K. The
total cost  associated  with Y2K  implementation  is not expected to  materially
impact  Registrant's  financial  position or results of  operations in any given
year. However, there can be no assurance that a failure to convert by Registrant
or another entity would not have a material adverse impact on Registrant.


                                       14
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

Registrant has invested a significant portion of its working capital reserves in
corporate  bonds  and  U.S.  Treasury  instruments.  The  market  value  of such
investments  is subject to  fluctuation  based upon  changes in  interest  rates
relative to each investment's  maturity date. Since Registrant's  investments in
bonds have various  maturity dates through 2023,  the value of such  investments
may be adversely  impacted in an  environment  of rising  interest  rates in the
event Registrant decides to liquidate any such investment prior to its maturity.
Although Registrant may utilize reserves to assist an underperforming  Property,
it otherwise  intends to hold such investments to their  respective  maturities.
Therefore,  Registrant  does not  anticipate  any  material  adverse  impact  in
connection with such investments.

The  Properties  are generally  located  where there is a demand for  low-income
housing.  Accordingly,  there is a significant  likelihood  that new  low-income
properties could be built in the general vicinity of the respective  Properties.
As a result,  the  respective  Properties'  ability to operate at high occupancy
levels is subject to competition from newly built low-income housing.


                                       15
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION


Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         As discussed in Part I, Item 2 -  Management's  Discussion and Analysis
         of Financial  Condition  and Results of  Operations,  the local general
         partner of Westminster  Apartments Limited Partnership  ("Westminster")
         reports that Westminster is ten months in arrears on its first mortgage
         obligation  as of September  30,  1999.  The local  general  partner is
         conducting  discussions  with the  lender,  which  has not  declared  a
         default.

Item 6.  Exhibits and Reports on Form 8-K

         None


                                       16
<PAGE>

                                   SIGNATURES

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


                                   AMERICAN TAX CREDIT PROPERTIES III L.P.
                                   (a Delaware limited partnership)

                                   By:   Richman Tax Credit Properties III L.P.,
                                         General Partner

                                   by:   Richman Housing Credits Inc.,
                                         general partner


Dated:  February 14, 2000          /s/ Richard Paul Richman
                                   by: Richard Paul Richman
                                       President, Chief Executive
                                       Officer and Director of the
                                       general partner of the
                                       General Partner


Dated:  February 14, 2000          /s/ Neal Ludeke
                                   by: Neal Ludeke
                                       Vice President and
                                       Treasurer of the general partner
                                       of the General Partner
                                       (Principal Financial and Accounting
                                       Officer of Registrant)
------------------------------

                                       17