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, 2000

                                       OR

                  [  ] 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                                (I.R.S. Employer
     of organization)                                       Identification No.)

Richman Tax Credit Properties III L.P.
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


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 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   No

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

Registrant has no voting stock.

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.

<PAGE>

                                     PART I

Item 1. Business

Formation

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")
which qualify 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 partnership 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  which 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.

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.

Employees

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.

Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act  of  1988,  Omnibus  Budget  Reconciliation  Act  of  1989,  Omnibus  Budget
Reconciliation   Act  of  1990,  Tax  Extension  Act  of  1991,  Omnibus  Budget
Reconciliation  Act of 1993,  Uruguay Round Agreements Act, Tax and Trade Relief
Extension  Act  of  1998  and  Tax  and  Trade  Relief  Extension  Act  of  1999
(collectively the "Tax Acts")

Registrant  is organized as a limited  partnership  and is a "pass  through" tax
entity which does not, itself, pay federal income tax. However,  the partners of
Registrant  who are  subject to federal  income tax may be  affected  by the Tax
Acts.  Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions  regarding its  investments.  Registrant does
not anticipate  that the Tax Acts will currently have a material  adverse impact
on Registrant's business operations, capital resources and plans or liquidity.

                                       2

<PAGE>

Item 2. Properties

The executive  offices of Registrant and the General  Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. 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 is 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 is expected to be 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, 1999, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.

Although  Registrant  generally owns a 98.9%-99%  limited  partnership  interest
("Local  Partnership  Interest")  in  the  Local  Partnerships,  Registrant  and
American  Tax  Credit  Properties  II  L.P.  ("ATCP  II"),  a  Delaware  limited
partnership and an affiliate of Registrant,  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                                   65.95              33.05
             Association Limited
            Partnership
            Ivy Family, L.P.                          61.75              37.25
            Lawrence Road Properties, Ltd.            61.75              37.25
            Mirador del Toa Limited                   59.06              39.94
            Partnership
            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 7). The subsidy
agreements  expire at various times during and after the  Compliance  Periods of
the Local  Partnerships.  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 and debt  structure of any or all Local
Partnerships  currently  receiving such subsidy or similar subsidies.  One Local
Partnership's  Section 8  contracts  are  currently  subject  to  renewal  under
applicable HUD guidelines.


                                       3

<PAGE>

Item 2. Properties (continued)
<TABLE>
<CAPTION>
                                                                                             Mortgage
                                                                                           loans payable
Name of Local Partnership                               Number                                 as of
Name of apartment complex                              of rental         Capital            December 31,       Subsidy (see
Apartment complex location                               units         contribution            1999            footnotes)
--------------------------                               -----         ------------            ----            ----------

<S>                                                       <C>           <C>                 <C>                 <C>
April Gardens Apartments II
  Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico                                   48           $  485,581           $1,995,920           (1b&d)

Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska                                          24              235,732            1,037,908           (1b&d)

Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi                                    16               95,412              468,586           (1b&d)

Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi                                    48              239,716(2)         1,438,380           (1b)

Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi                                   24              208,820              675,921           (1b&d)

Brisas del Mar Apartments
  Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico                                       66              668,172            2,652,057           (1b&d)

Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi                                         40              183,155            1,107,099           (1b&d)
                                                                                                                      (2)

Carrington Limited Dividend
  Housing Association Limited
  Partnership
Carrington Place
Farmington Hills, Michigan                                100            2,174,720            3,412,991           (1c)
                                                                                                                      (2)

Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey                                    59            4,204,576            5,134,372           (1a)

Chowan Senior Manor Associates
  Limited Partnership
Azalea Garden Senior Manor
  Apartments
Murfreesboro, North Carolina                               33              278,405            1,258,346           (1b&d)

Christian Street Commons
  Associates
Christian Street Commons
  Apartments
Philadelphia, Pennsylvania                                 18              581,645              613,742           (1a&b)

                                       4

<PAGE>

Item 2. Properties (continued)

                                                                                             Mortgage
                                                                                           loans payable
Name of Local Partnership                               Number                                 as of
Name of apartment complex                              of rental         Capital            December 31,       Subsidy (see
Apartment complex location                               units         contribution            1999            footnotes)
--------------------------                               -----         ------------            ----            ----------
<S>                                                       <C>           <C>                 <C>                 <C>

Country View Apartments
Country View Apartments
Pembroke, Maine                                             16          $  279,183           $  937,490          (1b&d)

Desarrollos de Belen Limited
  Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico                                   41             422,929            1,884,487          (1b&d)

Desarrollos de Emaus Limited
  Partnership
Hucares II Apartments
Naguabo, Puerto Rico                                        72             631,404            3,201,079          (1b&d)

Ellinwood Heights Apartments, L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas                                           24             156,261              688,038          (1b&d)

Fulton Street Houses Limited
  Partnership
Fulton Street Townhouse
  Apartments
New York, New York                                          35           1,948,081            3,869,930          (1a&b)

Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina                                    34             322,074            1,425,500          (1b&d)

Howard L. Miller Sallisaw
  Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma                                          24             130,158              615,616          (1b&d)

Hurlock Meadow Limited
  Partnership
Hurlock Meadow Apartments
Hurlock, Maryland                                           30             284,218            1,270,656          (1b&d)

Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi                                     32             135,528              793,732          (1b&d)

Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania                                  40           1,809,723            2,422,484          (1b&e)

LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida                                            32             253,580            1,013,370          (1b&d)
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi                                         24             123,799              758,834          (1b&d)

                                       5

<PAGE>

Item 2. Properties (continued)

                                                                                             Mortgage
                                                                                           loans payable
Name of Local Partnership                               Number                                 as of
Name of apartment complex                              of rental         Capital            December 31,       Subsidy (see
Apartment complex location                               units         contribution            1999            footnotes)
--------------------------                               -----         ------------            ----            ----------
<S>                                                       <C>           <C>                 <C>                 <C>

Loma Del Norte Limited
  Partnership
Loma Del Norte Apartments
Anthony, New Mexico                                        40          $  314,865             $1,437,699          (1b&d)
Long Reach Associates Limited
  Partnership
Oak Ridge Apartments
Bath, Maine                                                30             448,922              1,478,729          (1b&d)
Mirador del Toa Limited
  Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico                                      48             284,847              1,882,326          (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida                                       28             213,402                928,151          (1b&d)
NP-89 Limited Dividend Housing
  Association Limited Partnership
Newport Apartments
Clinton Township, Michigan                                 68           2,372,292              4,148,026          (1a,b&g)
Nash Hill Associates, Limited
  Partnership
Nash Hill Place
Williamsburg, Massachusetts                                28             302,575              1,469,157          (1b,d&f)
North Calhoun City, L.P.
North Calhoun City Apartments
Calhoun City, Mississippi                                  18             146,565                489,654          (1b&d)
Orange City Plaza, Limited
  Partnership
Orange City Plaza Apartments
Orange City, Iowa                                          32             456,090                486,007          (1a)
Puerta del Mar Limited Partnership
Puerta del Mar Apartments
Hatillo, Puerto Rico                                       66             630,570              2,525,101          (1b&d)
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi                                        40             191,512              1,146,172          (1b)
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania                                 29             597,050              1,563,392          (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania                                 24             208,465                897,825          (1b&d)
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida                                           87             751,560              3,308,477          (1b&d)

                                       6

<PAGE>

Item 2. Properties (continued)

                                                                                             Mortgage
                                                                                           loans payable
Name of Local Partnership                               Number                                 as of
Name of apartment complex                              of rental         Capital            December 31,      Subsidy (see
Apartment complex location                               units         contribution            1999           footnotes)
--------------------------                               -----         ------------            ----           ----------
<S>                                                       <C>           <C>                 <C>                 <C>

Summerfield Apartments Limited
  Partnership
Summerfield Apartments
Charlotte, North Carolina                                 52            $1,088,667         $1,760,666           (1b)
Sydney Engel Associates L.P.
(formerly known as Sydney Engel
  Associates)
The Castle
New York, New York                                       224            3,201,874          17,438,225           (1b)
Union Valley Associates Limited
  Partnership
Union Valley Apartments
Union Township, Pennsylvania                              36              371,589           1,447,381           (1b)
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi                                 24              191,695             847,086         (1b&d)
Waynesboro Apartments Limited
  Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania                                  36              360,859           1,483,359           (1b)
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi                                 28              230,212             769,944         (1b&d)
Westminster Apartments Limited
  Partnership
Westminster Apartments
Philadelphia, Pennsylvania                                42            1,047,993           1,609,558         (1a&b)
                                                                      -----------         -----------
                                                                      $29,264,476         $85,793,473
</TABLE>

    (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 Michigan State Housing Development Authority allows tenants, who
            would  otherwise  pay more  than 40% of  their  income  for rent and
            utilities, to receive rental subsidies.

        (d) 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.

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

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

        (g) The Local Partnership's Section 8 contracts are currently subject to
            renewal under applicable HUD guidelines.

(2)     Reflects amount attributable to Registrant only.

                                       7

<PAGE>

Item 3. Legal Proceedings

On August 13, 1999,  Everest Tax Credit  Investors,  LLC ("ETCI") and affiliates
(the  "Plaintiffs")  commenced Civil Action No.  99C-08-122-WTQ  in the Superior
Court of the State of Delaware in and for New Castle County against  Registrant,
the General Partner and the general partner of the General Partner. Counts I and
II of the original  complaint  were for breach of contract,  while Count III was
for wrongful  interference with economic  advantage in connection with the delay
by Registrant  in providing a list of its Unit holders to one of the  Plaintiffs
to facilitate a tender offer by ETCI for  Registrant's  Units.  On September 20,
1999,  a motion to dismiss the  Complaint  pursuant to Delaware  Superior  Court
Rules 12(b)(1) and 12(b)(6) was filed.

By letter  opinion dated January 7, 2000,  the Delaware  Superior  Court ordered
that Counts I and II of the Complaint be dismissed in their entirety.  The Court
denied  the motion to  dismiss  Count  III.  The  parties  have  proceeded  with
discovery  in  connection  with  the only  remaining  claim,  that for  wrongful
interference  with  economic  advantage.  ETCI  seeks  compensatory  damages  of
$246,168 and unspecified punitive damages. Registrant believes that it has valid
substantive defenses to this remaining claim.

Registrant is not aware of any other 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.


                                       8

<PAGE>

                                     PART II

Item 5. Market for  Registrant's  Common  Equity  and  Related  Security  Holder
        Matters

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  owners of Units as of June 1, 2000 was
1,458, holding 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.  These estimated  values are based on financial and other  information
available to the independent services (1) on the prior August 15th for reporting
on December  year-end  and  subsequent  client  account  statements  through the
following  May's month-end  client account  statements and (2) on March 31st for
reporting on June month-end and subsequent client account statements through the
November  month-end  client  account  statements  of the same year. 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.  In addition,  Unit holders may not realize such  estimated
values upon the liquidation of Registrant.

Distributions

Registrant owns a limited  partnership  interest in Local  Partnerships that are
the owners of Properties which 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, 2000 and 1999.

Low-income Tax Credits, which are subject to various limitations, may be used by
partners to offset  federal income tax  liabilities.  The Low-income Tax Credits
per Unit generated by Registrant  and allocated to the limited  partners for the
tax years ended  December 31, 1999 and 1998 and the  cumulative  Low-income  Tax
Credits allocated from inception through December 31, 1999 are as follows:

                                                            Low-income
                                                            Tax Credits
                                                            -----------
                  Tax year ended December 31, 1999            $ 153.68
                  Tax year ended December 31, 1998            $ 154.46

                  Cumulative totals                           $1,299.16

Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 - Properties, herein), Registrant expects to
generate total Low-income Tax Credits from investments in Local  Partnerships of
approximately $1,500 per Unit through December 31, 2003.


                                       9

<PAGE>


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.
<TABLE>
<CAPTION>

                                                                        Years Ended March 30,
                                         -----------------------------------------------------------------------------------------
                                                2000            1999                1998               1997              1996
                                                ----            ----                ----               ----              ----

<S>                                       <C>                <C>                <C>                <C>                <C>
Interest and other revenue                $   247,106        $   252,224        $   257,645        $   317,065        $   335,724

Equity in loss of
  investment in local partnerships        $(1,764,816)       $(2,453,590)       $(2,358,431)       $(2,509,806)       $(3,249,195)

Net loss                                  $(2,035,647)       $(2,756,082)       $(2,649,323)       $(2,718,536)       $(3,443,977)

Net loss per unit of
  limited partnership interest            $    (56.16)       $    (76.04)       $    (73.09)       $    (75.00)       $    (95.02)


                                                                             As of March 30,
                                         -----------------------------------------------------------------------------------------
                                                 2000            1999              1998                1997            1996
                                                 ----            ----              ----                ----            ----

Total assets                             $  7,579,955       $  9,511,546       $ 12,106,269        $ 15,503,629      $ 17,832,235
                                         ============       ============       ============        ============      ============
</TABLE>

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   partnership   interests   in  local   partnerships   (the   "Local
Partnerships")  which own  low-income  multifamily  residential  complexes  (the
"Property"  or  "Properties")  which  qualify for the  low-income  tax credit in
accordance  with Section 42 of the Internal  Revenue Code (the  "Low-income  Tax
Credit").  Registrant  has utilized the Net Proceeds in acquiring an interest in
forty-three Local Partnerships.

As of March 30, 2000,  Registrant has cash and cash  equivalents and investments
in bonds  totaling  $3,326,659,  which is available  for  operating  expenses of
Registrant  and  circumstances  which  may  arise in  connection  with the Local
Partnerships.  As of March 30, 2000, Registrant's investments in bonds represent
corporate  bonds of $1,438,325 and U.S.  Treasury debt  securities of $1,014,625
with various maturity dates ranging from 2001 to 2023.  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  primarily from interest earned on working capital and limited cash
distributions from Local Partnerships.

During the year ended March 30, 2000,  Registrant  received  cash from  interest
revenue,  maturity/redemption  of bonds and  distributions and other income from
Local  Partnerships  and utilized  cash for  operating  expenses.  Cash and cash
equivalents  and  investments  in  bonds   decreased,   in  the  aggregate,   by
approximately  $131,000  during the year ended March 30, 2000 (which  includes a
net  unrealized  loss on  investments in bonds of  approximately  $153,000,  the
amortization of net premium on investments in bonds of approximately $13,000 and
the accretion of zero coupon bonds of  approximately  $87,000).  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 year ended  March 30,  2000,  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,  1999  of  $1,538,816,   an  adjustment  to
Registrant's  carrying  value of its  investment  in two Local  Partnerships  of
$226,000 in accordance  with  applicable  accounting  guidelines (see discussion
below under Results of Operations)  and cash  distributions  received from Local
Partnerships of $30,908  (exclusive of distributions  from Local Partnerships of
$22,093 classified as other income). Payable to general partner and affiliate in
the  accompanying  balance  sheet  as  of  March  30,  2000  represents  accrued
management and administration fees.


                                       10

<PAGE>

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 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 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 carrying  value of
Registrant's  investment  in local  partnerships  may be reduced if the carrying
value is considered to exceed the estimated  value derived by management  (which
contemplates  remaining  Low-income  Tax Credits and potential  residual  value,
among  other  things)  ("Local   Partnership   Carrying  Value").   Accordingly,
cumulative  losses  and cash  distributions  in excess of the  investment  or an
adjustment to an investment'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,  2000,  1999 and 1998
resulted in net losses of $2,035,647, $2,756,082, and $2,649,323,  respectively.
The  decrease  in net loss  from  1999 to 2000 is  primarily  attributable  to a
decrease in equity in loss of investment in local  partnerships of approximately
$689,000.  The increase in net loss from 1998 to 1999 is primarily  attributable
to an  increase  in  equity  in loss of  investment  in  local  partnerships  of
approximately  $95,000.  Equity in loss of investment in local  partnerships has
fluctuated over the last three years as a result of (i) Registrant adjusting the
Local  Partnership  Carrying Value in connection  with its investments in Justin
Associates  and  Summerfield  Apartments  Limited  Partnership  by  $60,000  and
$166,000,  respectively  during the year ended March 30, 2000,  (ii)  impairment
losses recorded in connection with Westminster  Apartments  Limited  Partnership
("Westminster")  in 1999 and Christian  Street  Commons  Associates  ("Christian
Street") in 1998 and (iii)  changes in the net  operating  losses of those Local
Partnerships in which Registrant continues to have an investment balance.

The Local Partnerships' net loss of approximately  $3,356,000 for the year ended
December  31,  1999   includes   depreciation   and   amortization   expense  of
approximately  $4,046,000,  interest  on  non-mandatory  debt  of  approximately
$353,000,  and  does  not  include  required  principal  payments  on  permanent
mortgages  of  approximately  $585,000.  The  Local  Partnerships'  net  loss of
approximately   $5,197,000  for  the  year  ended  December  31,  1998  includes
depreciation and amortization expense of approximately  $4,058,000,  interest on
non-mandatory  debt of  approximately  $333,000  and a loss from  impairment  of
long-lived  assets of approximately  $1,803,000,  and does not include principal
payments  on  permanent   mortgages  of   approximately   $561,000.   The  Local
Partnerships'  net loss of approximately  $4,269,000 for the year ended December
31,  1997  includes  depreciation  and  amortization  expense  of  approximately
$4,066,000,  interest on non-mandatory debt of approximately $331,000 and a loss
from impairment of long-lived assets of approximately  $1,033,000,  and does not
include principal payments on permanent mortgages of approximately $432,000.

Local Partnership Matters

Registrant's  primary objective is 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 is expected to be 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


                                       11

<PAGE>

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

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, 1999,  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.  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  and  debt  structure  of any or all  Local  Partnerships
currently  receiving such subsidy or similar subsidies.  One Local Partnership's
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").  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 year ended December 31, 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 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 require the Local General
Partner  to  advance  funds to cover  operating  deficits  through  2009.  As of
December 31, 1999, Westminster is thirteen months in arrears on its mortgage and
seventeen to nineteen  months in arrears on its  replacement  reserve and escrow
requirements. Although the Local General Partner had been conducting discussions
with the  lender,  the  lender  recently  issued a notice  of  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.  Westminster  incurred  an
operating deficit of approximately $69,000 for the year ended December 31, 1999,
which amount  includes a provision  for mandatory  debt service and  replacement
reserve  deposits  of $6,245 and $1,184  per month,  respectively.  Registrant's
investment balance in Westminster,  after 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.

The terms of the partnership  agreement of Sydney Engel Associates L.P. ("Sydney
Engel")  require the Local General  Partners to advance funds to cover operating
deficits up to $1,000,000  through April 2002 and to cause the management  agent
to  defer  property  management  fees in  order to  avoid a  default  under  the
mortgage.  Sydney Engel incurred an operating deficit of approximately  $220,000
for the year ended December 31, 1999, which includes property management fees of
approximately  $100,000.  Payments on the  mortgage  and real  estate  taxes are
current.  During  1999,  Sydney  Engel  utilized  approximately  $54,000  of  an
operating deficit reserve,  which has a balance of approximately  $320,000 as of
December  31,  1999.  Registrant's  investment  balance in Sydney  Engel,  after
cumulative  equity losses,  became zero during the year ended March 30, 1997. Of
Registrant's total annual Low-income Tax Credits,  approximately 9% is allocated
from Sydney Engel.

Fulton  Street Houses  Limited  Partnership  ("Fulton  Street") has an escrow of
approximately  $299,000 as of December 31, 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  $38,000 for the year ended  December  31, 1999.  Of  Registrant's
total annual  Low-income Tax Credits,  approximately 8% is allocated from Fulton
Street.

                                       12

<PAGE>


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

Inflation

Inflation  is not  expected to have a material  adverse  impact on  Registrant's
operations during its period of ownership of the Local Partnership Interests.

Year 2000

Registrant  successfully completed a program to ensure Year 2000 readiness. As a
result, Registrant had no Year 2000 problems that affected its business, results
of operations or financial condition.


Item 7a.  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 under performing 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.


                                       13

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 8. Financial Statements and Supplementary Data


                                 Table of Contents                         Page

Independent Auditors' Report................................................15

Balance Sheets..............................................................16

Statements of Operations....................................................17

Statements of Changes in Partners' Equity (Deficit).........................18

Statements of Cash Flows....................................................19

Notes to Financial Statements...............................................21


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.


                                       14

<PAGE>

                          Independent Auditors' Report


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. as of March 30, 2000 and 1999, 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, 2000.  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.

        We conducted our audits in accordance with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  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 provide a reasonable basis for our opinion.

        In our  opinion,  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,  2000 and  1999,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
March 30, 2000, in conformity with generally accepted accounting principles.


/s/ Reznick Fedder & Silverman

Bethesda, Maryland
May 26, 2000


                                       15

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                             MARCH 30, 2000 AND 1999

                                                                              Notes             2000                  1999
                                                                              -----             ----                  ----
ASSETS

<S>                                                                            <C>          <C>                  <C>
Cash and cash equivalents                                                      3,9          $   873,709          $   567,613
Investments in bonds                                                           4,9            2,452,950            2,890,010
Investment in local partnerships                                               5,8            4,236,668            6,032,392
Interest receivable                                                              9               16,628               21,531
                                                                                            -----------          -----------
                                                                                            $ 7,579,955          $ 9,511,546
                                                                                            ===========          ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                                          8          $ 1,181,877          $ 1,105,703
  Payable to general partner and affiliate                                     6,8            1,246,404            1,061,185
  Other                                                                                           6,950               11,700
                                                                                            -----------          -----------
                                                                                              2,435,231            2,178,588
                                                                                            -----------          -----------
Commitments and contingencies                                                    8

Partners' equity (deficit)                                                     2,4

  General partner                                                                             (262,775)             (242,419)
  Limited partners (35,883 units of limited partnership
    interest outstanding)                                                                    5,514,902             7,530,193
  Accumulated other comprehensive income (loss), net                                          (107,403)               45,184
                                                                                            ----------           -----------
                                                                                             5,144,724             7,332,958
                                                                                            ----------           -----------
                                                                                           $ 7,579,955           $ 9,511,546
                                                                                           ===========           ===========
</TABLE>

                       See Notes to Financial Statements.

                                       16

<PAGE>
<TABLE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                    YEARS ENDED MARCH 30, 2000, 1999 AND 1998

                                                     Notes         2000              1999               1998
                                                     -----         ----              ----               ----
REVENUE

<S>                                                  <C>        <C>                <C>                <C>
Interest                                                       $   225,013        $   244,767        $   250,973
Other income from local partnerships                                22,093              7,457              6,672
                                                               -----------        -----------        -----------
TOTAL REVENUE                                                      247,106            252,224            257,645
                                                               -----------        -----------        -----------
EXPENSES

Administration fees                                     8          230,571            230,571            230,571
Management fees                                        6,8         230,571            230,571            230,571
Professional fees                                                   38,741             67,327             67,118
Printing, postage and other                                         18,054             26,247             20,277
                                                               -----------        -----------        -----------
TOTAL EXPENSES                                                     517,937            554,716            548,537
                                                               -----------        -----------        -----------
Loss from operations                                              (270,831)          (302,492)          (290,892)

Equity in loss of investment in local                   5       (1,764,816)        (2,358,431)
                                                               -----------        -----------        -----------
partnerships                                                    (2,453,590)

NET LOSS                                                        (2,035,647)        (2,649,323)
                                                                                                                         (2,756,082)

Other comprehensive income (loss)                       4         (152,587)            11,902            215,397
                                                               -----------        -----------        -----------
COMPREHENSIVE LOSS                                             $(2,188,234)       $(2,744,180)       $(2,433,926)
                                                               ===========        ===========        ===========

NET LOSS ATTRIBUTABLE TO                                2

  General partner                                              $   (20,356)       $   (27,561)       $   (26,493)
  Limited partners                                              (2,015,291)        (2,728,521)        (2,622,830)
                                                               -----------        -----------        -----------
                                                               $(2,035,647)       $(2,756,082)       $(2,649,323)
                                                               ===========        ===========        ===========

NET LOSS per unit of limited partnership
  interest (35,883 units of limited                            $    (56.16)       $    (76.04)       $    (73.09)
  partnership interest)                                        ===========        ===========        ===========
</TABLE>


                       See Notes to Financial Statements.

                                       17

<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
               STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                    YEARS ENDED MARCH 30, 2000, 1999 AND 1998

                                                                                                Accumulated Other
                                                            General            Limited           Comprehensive
                                                            Partner            Partners        Income (Loss), Net        Total
                                                            -------            --------        ------------------        -----

<S>                                                      <C>                  <C>                  <C>                 <C>
Partners' equity (deficit), March 30, 1997                $   (188,365)       $ 12,881,544        $   (182,115)       $ 12,511,064


Net loss                                                       (26,493)         (2,622,830)                             (2,649,323)

Other comprehensive income, net                                                                        215,397             215,397
                                                          ------------        ------------       -------------        ------------

Partners' equity (deficit), March 30, 1998                    (214,858)         10,258,714              33,282           10,077,138

Net loss                                                       (27,561)         (2,728,521)                              (2,756,082)

Other comprehensive income, net                                                                         11,902              11,902
                                                          ------------        ------------       -------------        ------------
Partners' equity (deficit), March 30, 1999                    (242,419)          7,530,193              45,184           7,332,958


Net loss                                                       (20,356)         (2,015,291)                             (2,035,647)

Other comprehensive loss, net                                                                         (152,587)           (152,587)
                                                          ------------        ------------       -------------        ------------
Partners' equity (deficit), March 30, 2000                $   (262,775)       $  5,514,902        $   (107,403)       $  5,144,724
                                                          ============        ============        ============        ============
</TABLE>

                       See Notes to Financial Statements.

                                       18

<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 30, 2000, 1999 AND 1998

                                                                                    2000                1999                1998
                                                                                    ----                ----                ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                  <C>                 <C>                 <C>

Interest received                                                               $   156,395         $   172,539         $   183,964
Cash used for local partnerships for deferred expenses                               (4,750)             (4,750)             (4,750)
Cash paid for
    administration fees                                                            (100,000)           (100,000)           (100,435)
    management fees                                                                (100,000)           (100,000)           (100,000)
    professional fees                                                               (38,741)            (84,827)            (55,618)
    printing, postage and other expenses                                            (17,368)            (31,250)            (26,828)
                                                                                -----------         -----------         -----------
Net cash used in operating activities                                              (148,288)           (103,232)           (104,899)
                                                                                -----------         -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions and other income from local partnerships                          53,001              36,589              38,191
Maturity/redemption of bonds                                                        357,994             259,940              75,000
Transfer from (to) restricted cash                                                                       84,433           1,224,775
Investment in local partnerships                                                                        (84,433)         (1,224,775)
                                                                                -----------         -----------         -----------
Net cash provided by investing activities                                           410,995             296,529             113,191
                                                                                -----------         -----------         -----------

Net increase in cash and cash equivalents                                           306,096             148,241               9,959

Cash and cash equivalents at beginning of year                                      567,613             419,372             409,413
                                                                                -----------         -----------         -----------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                        $   873,709         $   567,613         $   419,372
                                                                                ===========         ===========         ===========

Significant Non-Cash Investing Activities

Unrealized gain (loss) on investments in bonds, net                             $  (152,587)        $    11,902         $   215,397
                                                                                ===========         ===========         ===========
</TABLE>

See reconciliation of net loss to net cash used in operating  activities on page
20.

                       See Notes to Financial Statements.

                                       19

<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    YEARS ENDED MARCH 30, 2000, 1999 AND 1998

                                                                                 2000                1999                 1998
                                                                                 ----                ----                 ----
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
    ACTIVITIES

<S>                                                                           <C>                  <C>                  <C>
Net loss                                                                      $(2,035,647)         $(2,756,082)         $(2,649,323)

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

    Equity in loss of investment in local partnerships                          1,764,816            2,453,590            2,358,431
    Distributions from local partnerships classified as                           (22,093)              (7,457)              (6,672)
    other income
    Loss on redemption of bonds                                                       677
    Amortization of net premium on investments in bonds                            13,207               13,206               14,907
    Accretion of zero coupon bonds                                                (86,728)             (86,490)             (85,180)
    Decrease in interest receivable                                                 4,903                  378                3,264
    Increase in payable to general partner                                        185,219              130,571              130,571
    Increase in accounts payable and accrued expenses                              76,174              108,069              135,520
    Decrease in other liabilities                                                  (4,750)              (4,750)              (4,750)
                                                                              -----------          -----------          -----------
NET CASH USED IN OPERATING ACTIVITIES                                         $  (104,899)         $  (148,288)         $  (103,232)
                                                                              ===========          ===========          ===========
</TABLE>


                       See Notes to Financial Statements.


                                       20

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                          MARCH 30, 2000, 1999 AND 1998


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") which qualify 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  partnership  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.

      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  which  includes  capital  contributions
      payable,  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 regularly assesses the carrying value of its investment in
      local  partnerships.  If the carrying  value is  considered  to exceed the
      value derived by management (which contemplates  remaining  Low-income Tax
      Credits and residual value, among other things),  the Partnership  reduces
      its investment in any such Local  Partnership  and includes such reduction
      in equity in loss of investment in local partnerships.

      Use of Estimates

      The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles 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.

      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.

      Restricted Cash

      Restricted  cash  represents  funds  set  aside to make the  Partnership's
      required capital contributions to Local Partnerships.

      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  Standards ("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.


                                       21

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


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

    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  straight-line  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
    redemption  or sale 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.


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.


3.  Cash and Cash Equivalents

    As of March 30,  2000,  the  Partnership  has cash and cash  equivalents  of
    $873,709   which  are  deposited  in   interest-bearing   accounts  with  an
    institution   which  is  not  insured  by  the  Federal  Deposit   Insurance
    Corporation.


                                       22

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


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 resolving circumstances which
      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, 2000, certain information  concerning investments in bonds
is as follows:
<TABLE>
<CAPTION>

                                                                           Gross               Gross                Estimated
                                                       Amortized         unrealized          unrealized               fair
     Description and maturity                            cost              gains               losses                 value
     ------------------------                            ----              -----               ------                 -----
<S>                                                  <C>                 <C>                  <C>                  <C>

Corporate debt securities
  Within one year                                    $   152,223         $      --            $      (224)         $   151,999
  After one year through five years                      302,899                --                 (3,436)             299,463
  After five years through ten years                     809,524               2,759              (34,022)             778,261
  After ten years                                        221,181                --                (12,579)             208,602
                                                    ------------         -----------         ------------         ------------
                                                       1,485,827               2,759              (50,261)           1,438,325
U.S. Treasury debt securities
  After five years through ten years                   1,074,526                --                (59,901)           1,014,625
                                                    ------------         -----------         ------------         ------------
                                                     $ 2,560,353         $     2,759          $  (110,162)         $ 2,452,950

As of March 30, 1999, certain information  concerning investments in bonds is as
follows:

                                                                             Gross               Gross                Estimated
                                                       Amortized           unrealized          unrealized               fair
     Description and maturity                            cost                gains               losses                 value
     ------------------------                            ----                -----               ------                 -----
<S>                                                  <C>                   <C>                  <C>                  <C>

Corporate debt securities
  Within one year                                    $   214,268         $      --            $    (1,000)         $   213,268
  After one year through five years                      458,611              11,841                 --                470,452
  After five years through ten years                     703,640              25,400                 --                729,040
  After ten years                                        370,063                --                 (6,008)             364,055
                                                    ------------         -----------         ------------         ------------
                                                       1,746,582              37,241               (7,008)           1,776,815
U.S. Treasury debt securities
  After five years through ten years                   1,098,244              14,951                 --              1,113,195
                                                    ------------         -----------         ------------         ------------
                                                     $ 2,844,826         $    52,192          $    (7,008)         $ 2,890,010
                                                    ============         ===========         ============         ============
</TABLE>

                                       23

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.    Investment in Local Partnerships

      As of March 30, 2000, 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.  Carrington Limited Dividend Housing Association Limited Partnership;
        9.  Chestnut Park Associates, L.P.;*
       10.  Chowan Senior Manor Associates Limited Partnership;
       11.  Christian Street Commons Associates ("Christian Street");
       12.  Country View Apartments;
       13.  Desarrollos de Belen Limited Partnership;
       14.  Desarrollos de Emaus Limited Partnership;
       15.  Ellinwood Heights Apartments, L.P.;
       16.  Fulton Street Houses Limited Partnership;
       17.  Hayes Run Limited Partnership;
       18.  Howard L. Miller Sallisaw Apartments II, L.P.;
       19.  Hurlock Meadow Limited Partnership;
       20.  Ivy Family, L.P.;
       21.  Justin Associates ("Justin");
       22.  LaBelle Commons, Ltd.;
       23.  Lawrence Road Properties, Ltd.;
       24.  Loma Del Norte Limited Partnership;
       25.  Long Reach Associates Limited Partnership;
       26.  Mirador del Toa Limited Partnership;
       27.  Moore Haven Commons, Ltd.;
       28.  NP-89 Limited Dividend Housing Association Limited Partnership;
       29.  Nash Hill Associates, Limited Partnership;
       30.  North Calhoun City, L.P.;
       31.  Orange City Plaza, Limited Partnership;
       32.  Puerta del Mar Limited Partnership;
       33.  Purvis Heights Properties, L.P.;
       34.  Queen Lane Investors;
       35.  Somerset Manor, Ltd.;
       36.  Sugar Cane Villas, Ltd.;
       37.  Summerfield Apartments Limited Partnership ("Summerfield");
       38.  Sydney Engel Associates L.P. (formerly known as Sydney Engel
            Associates);*
       39.  Union Valley Associates Limited Partnership;
       40.  Walnut Grove Family, L.P.;
       41.  Waynesboro Apartments Limited Partnership;
       42.  West Calhoun City, L.P.; and
       43.  Westminster Apartments Limited Partnership ("Westminster").

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

                                       24

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.  Investment in Local Partnerships (continued)

    Although the  Partnership  generally  owns a 98.9%-99%  limited  partnership
    interest in the Local Partnerships,  the Partnership and American Tax Credit
    Properties  II L.P.  ("ATCP  II"),  a Delaware  limited  partnership  and an
    affiliate of the Partnership,  together,  in the aggregate,  own a 99% Local
    Partnership 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                                  65.95           33.05
                 Association Limited Partnership
               Ivy Family, L.P.                         61.75           37.25
               Lawrence Road Properties, Ltd.           61.75           37.25
               Mirador del Toa Limited                  59.06           39.94
               Partnership
               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,  the Partnership committed to make capital contribution payments
    in the  aggregate  amount of  $29,264,476,  all of which has been paid as of
    March 30,  2000.  As of  December  31,  1999,  the Local  Partnerships  have
    outstanding  mortgage loans payable totaling  approximately  $85,793,000 and
    accrued  interest payable on such loans totaling  approximately  $2,827,000,
    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  $1,599,522,  $2,502,485 and $1,665,224 for the years ended December 31,
    1999, 1998 and 1997,  respectively,  as reflected in the combined statements
    of operations of the Local Partnerships reflected herein Note 5.

    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  has  reduced  its  investment  in  Justin  and
    Summerfield  by $60,000  and  $166,000,  respectively  during the year ended
    March 30, 2000.  Such losses are 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, 2000.

    The  Properties  are subject to  evaluation  for the  existence of permanent
    impairment  under  applicable  accounting  guidelines,  whereby the carrying
    value of the real  property  may be  adjusted  downward  based on results of
    operations  and  other  events.   As  a  result  of  such  evaluation,   the
    accompanying  statements of operations of the Local  Partnerships  reflected
    herein Note 5 include loss from  impairment for the years ended December 31,
    1998 and 1997 of $1,802,881 in connection with Westminster and $1,032,653 in
    connection with Christian Street, respectively.

    The combined  balance  sheets of the Local  Partnerships  as of December 31,
    1999  and  1998 and the  combined  statements  of  operations  of the  Local
    Partnerships  for the  years  ended  December  31,  1999,  1998 and 1997 are
    reflected on pages 26 and 27, respectively.

                                       25

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998

5.    Investment in Local Partnerships (continued)

      The combined  balance sheets of the Local  Partnerships as of December 31,
      1999 and 1998 are as follows:
<TABLE>
<CAPTION>

                                                             1999            1998
                                                             ----            ----
     ASSETS

<S>                                                     <C>             <C>
Cash and cash equivalents                               $  1,515,733    $  1,396,493
Rents receivable                                             415,459         429,688
Capital contributions receivable                                              84,433
Escrow deposits and reserves                               4,772,669       4,657,419
Land                                                       3,910,215       3,910,215
Buildings and improvements (net of accumulated
  depreciation of $35,035,895 and $31,057,575)            78,393,812      82,003,262
Intangible assets (net of accumulated amortization of
  $490,393 and $618,890)                                     670,822         716,724
Other                                                        845,257         804,785
                                                        ------------    ------------
                                                        $ 90,523,967    $ 94,003,019
                                                        ============    ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                 $    599,251    $    619,342
  Due to related parties                                   5,028,110       5,154,179
  Mortgage loans                                          85,793,473      86,358,980
  Notes payable                                               16,893          26,990
  Accrued interest                                         2,826,511       2,420,323
  Other                                                      866,170         613,520
                                                        ------------    ------------
                                                          95,130,408      95,193,334
                                                        ------------    ------------
Partners' equity (deficit)

  American Tax Credit Properties III L.P.
    Capital contributions, net of distributions
      (includes receivable of $84,433 in 1998)            28,965,604      29,004,177
    Cumulative loss                                      (24,515,282)    (22,976,466)
                                                        ------------    ------------
                                                           4,450,322       6,027,711
                                                        ------------    ------------
  General partners and other limited partners,
    including ATCP II
    Capital contributions, net of distributions             (199,479)       (177,871)
    Cumulative loss                                       (8,857,284)     (7,040,155)
                                                        ------------    ------------
                                                          (9,056,763)     (7,218,026)
                                                        ------------    ------------
                                                          (4,606,441)     (1,190,315)
                                                        ------------    ------------
                                                        $ 90,523,967    $ 94,003,019
                                                        ============    ============
</TABLE>

                                       26

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.    Investment in Local Partnerships (continued)

      The combined  statements of operations of the Local  Partnerships  for the
      years ended December 31, 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                                                  1999           1998            1997
                                                                                  ----           ----            ----
     REVENUE

<S>                                                                             <C>           <C>             <C>
Rental                                                                        $ 10,727,235    $ 10,620,935    $ 10,466,426
Interest and other                                                                 427,800         398,028         365,948
                                                                              ------------    ------------    ------------
Total Revenue                                                                   11,155,035      11,018,963      10,832,374
                                                                              ------------    ------------    ------------
EXPENSES

Administrative                                                                   2,222,536       2,173,131       2,049,122
Utilities                                                                        1,052,458         988,768       1,013,167
Operating, maintenance and other                                                 2,632,826       2,630,453       2,253,753
Taxes and insurance                                                              1,246,212       1,235,007       1,270,567
 Financial (including amortization of
  $45,903, $46,025 and $48,430)                                                  3,357,211       3,373,926       3,464,203
Depreciation                                                                     3,999,737       4,011,788       4,017,625
Loss from impairment of long-lived assets                                                        1,802,881       1,032,653
                                                                              ------------    ------------    ------------
Total Expenses                                                                  14,510,980      16,215,954      15,101,090
                                                                              ------------    ------------    ------------
NET LOSS                                                                      $ (3,355,945)   $ (5,196,991)   $ (4,268,716)
                                                                              ============    ============    ============
NET LOSS ATTRIBUTABLE TO

   American Tax Credit Properties III L.P                                     $ (1,538,816)   $ (2,453,590)   $ (2,358,431)
   General  partners and other limited  partners,
    including ATCP II, which includes  specially
    allocated  items of  revenue  to  certain
    general partners of $1,697 in 1998, and $1,599,522,
    $2,502,485 and $1,665,224 of Partnership
     loss in excess of investment                                               (1,817,129)     (2,743,401)     (1,910,285)
                                                                              ------------    ------------    ------------
                                                                              $ (3,355,945)   $ (5,196,991)   $ (4,268,716)
                                                                              ============    ============    ============
</TABLE>

                                       27

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5. Investment in Local Partnerships (continued)

Investment  activity with respect to each Local  Partnership  for the year ended
March 30, 2000 is as follows:
<TABLE>
<CAPTION>

                                                     Partnership's    Adjustment                        Cash
                                     Investment       equity in          to          Cash           distributions   Investment
                                     in Local           income        carrying    distributions      classified     in Local
                                     Partnership        (loss)         value        received      as other income  Partnership
                                     balance            for the      during the    during the        during the      balance
                                       as of          year ended     year ended    year ended        year ended       as of
                                     March 30,       December 31,     March 30,     March 30,          March 30,    March 30,
Name of Local Partnership              1999              1999           2000          2000              2000          2000
-------------------------              ----            --------     --------------  ------------   -------------   ----------
<S>                                    <C>            <C>              <C>           <C>             <C>             <C>
April Gardens Apartments II            $      --     $       --(2)    $      --      $    (1,920)   $     1,920    $        --
  Limited Partnership
Ashland Park Apartments, L.P.                 --             --(2)           --                --             --            --

Auburn Family, L.P.                         27,276         (7,721)           --                --             --           19,555
Batesville Family, L.P.                       --             --(2)           --           (1,330)         1,330             --

Bay Springs Elderly, L.P.                   50,532        (17,938)           --                --             --           32,594
Brisas del Mar Apartments Limited             --             --(2)           --           (2,640)         2,640            --
  Partnership
Bruce Housing Associates, L.P.              15,567        (15,567)(1)        --                --             --           --

Carrington Limited Dividend
  Housing Association
  Limited Partnership                      896,926       (124,775)           --                --             --          772,151
Chestnut Park Associates, L.P.             420,223       (420,223)(1)        --                --             --           --

Chowan Senior Manor Associates
  Limited Partnership                         --             --(2)           --           (1,580)         1,580            --

Christian Street Commons Associates           --             --(2)           --                --             --           --

Country View Apartments                    133,932        (20,120)           --                --             --          113,812
Desarrollos de Belen Limited                43,039        (43,039)(1)        --                --             --             --
  Partnership

Desarrollos de Emaus Limited                74,619        (74,619)(1)        --                --             --             --
  Partnership

Ellinwood Heights Apartments, L.P.           8,209          2,439            --                --             --           10,648
Fulton Street Houses Limited               286,952       (274,521)           --                --             --           12,431
  Partnership
Hayes Run Limited Partnership                 --             --(2)           --           (1,785)         1,785              --

Howard L. Miller Sallisaw                   16,836            138            --           (1,588)         1,588            16,974
  Apartments II, L.P.
Hurlock Meadow Limited Partnership            --             --(2)           --                --             --             --

Ivy Family, L.P.                             3,728         (3,728)(1)        --                --             --             --

Justin Associates                          893,800       (111,361)        (60,000)(3)          --             --          722,439

LaBelle Commons, Ltd.                       51,349        (39,840)           --              (2,500)          --            9,009
Lawrence Road Properties, Ltd.                --             --(2)           --              (1,007)      1,007              --

Loma Del Norte Limited Partnership          95,699        (34,169)           --              (2,000)          --           59,530
Long Reach Associates Limited              117,375        (28,249)           --                --             --           89,126
  Partnership
Mirador del Toa Limited Partnership           --             --(2)           --              (1,144)      1,144              --

Moore Haven Commons, Ltd.                     --             --(2)           --                --             --             --

NP-89 Limited Dividend Housing
  Association Limited Partnership        1,349,014       (127,987)           --             (20,000)          --       1,201,027

Nash Hill Associates, Limited              135,800        (30,053)           --                --             --         105,747
  Partnership
North Calhoun City, L.P.                    66,551        (12,026)           --                --             --          54,525
Orange City Plaza, Limited                 375,625         (3,558)           --                --             --         372,067
  Partnership
Puerta del Mar Limited Partnership            --             --(2)           --              (2,640)      2,640              --

Purvis Heights Properties, L.P.             60,336         (5,325)           --              (1,408)         --           53,603
Queen Lane Investors                       134,021        (69,661)           --                --            --           64,360
Somerset Manor, Ltd.                          --             --(2)           --                --            --              --

Sugar Cane Villas, Ltd.                       --             --(2)           --              (6,459)      6,459              --

Summerfield Apartments Limited             627,741        (16,442)       (166,000)(3)        (5,000)         --          440,299
  Partnership

Sydney Engel Associates L.P.                  --             --(2)           --                --            --              --

Union Valley Associates Limited             45,694        (31,306)           --                --            --           14,388
  Partnership
Walnut Grove Family, L.P.                     --             --(2)           --                --            --              --

Waynesboro Apartments Limited               12,447        (12,447)(1)        --                --            --              --
  Partnership

West Calhoun City, L.P.                     89,101        (16,718)           --                --            --           72,383
Westminster Apartments Limited                --             --(2)           --                --            --              --
  Partnership                        -------------   ------------   -------------     -------------  ----------     ------------
                                     $   6,032,392   $     (1,538   $    (226,000)    $     (53,001) $   22,093     $  4,236,668
                                     =============   ============   =============     =============  ==========     ============
</TABLE>

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

(2)  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.

(3)  The Partnership has adjusted the investment's  carrying value in accordance
     with applicable accounting guidelines.


                                       28

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5. Investment in Local Partnerships (continued)

Investment  and  capital  contribution  activity  with  respect  to  each  Local
Partnership for the year ended March 30, 1999 is as follows:
<TABLE>
<CAPTION>

                                                        Partnership's                        Cash
                                        Investment       equity in           Cash         distributions     Investment
                                        in Local           income         distributions    classified        in Local
                                        Partnership        (loss)          receiving        as other       Partnership
                                        balance            for the         during the     income during     balance
                                          as of          year ended        year ended    the year ended      as of
                                        March 30,        December 31,      March 30,        March 30,       March 30,
Name of Local Partnership                 1998              1998             1999             1999            1999
-------------------------                 ----            --------       ------------     --------------   -----------
<S>                                     <C>              <C>              <C>           <C>              <C>

April Gardens Apartments II Limited       $      --       $     --(2)    $      (960)   $       960    $       --
  Partnership
Ashland Park Apartments, L.P.                   4,219         (4,219)(1)          --             --            --

Auburn Family, L.P.                            39,750        (12,474)             --             --           27,276
Batesville Family, L.P.                          --             --(2)             --             --            --

Bay Springs Elderly, L.P.                      73,081        (22,549)             --             --           50,532
Brisas del Mar Apartments Limited                --             --(2)         (1,320)         1,320            --
  Partnership
Bruce Housing Associates, L.P.                 30,489        (14,922)             --             --           15,567
Carrington Limited Dividend Housing
  Association Limited Partnership           1,010,852       (113,926)             --             --           896,926

Chestnut Park Associates, L.P.                859,232       (439,009)             --             --          420,223

Chowan Senior Manor Associates Limited          7,930         (4,754)(1)      (3,176)            --            --
  Partnership
Christian Street Commons Associates              --             --(2)             --             --            --

Country View Apartments                       156,142        (20,296)         (1,914)            --          133,932
Desarrollos de Belen Limited                  102,521        (59,482)             --             --           43,039
  Partnership
Desarrollos de Emaus Limited                  164,558        (89,939)             --             --           74,619
  Partnership
Ellinwood Heights Apartments, L.P.             14,232         (6,023)             --             --            8,209
Fulton Street Houses Limited                  569,673       (282,721)             --             --          286,952
  Partnership
Hayes Run Limited Partnership                    --             --(2)         (1,785)         1,785            --

Howard L. Miller Sallisaw Apartments           30,407        (13,571)             --             --           16,836
  II, L.P.
Hurlock Meadow Limited Partnership               --             --(2)         (1,500)         1,500            --

Ivy Family, L.P.                               17,371        (13,643)             --             --            3,728
Justin Associates                           1,000,293       (106,493)             --             --          893,800

LaBelle Commons, Ltd.                          75,250        (21,401)         (2,500)            --           51,349
Lawrence Road Properties, Ltd.                   --             --(2)             --             --            --

Loma Del Norte Limited Partnership            120,434        (24,735)             --             --           95,699
Long Reach Associates Limited                 172,088        (54,713)             --             --          117,375
  Partnership
Mirador del Toa Limited Partnership              --             --(2)           (572)           572            --

Moore Haven Commons, Ltd.                        --             --(2)             --             --            --

NP-89 Limited Dividend Housing
  Association Limited Partnership           1,498,571       (139,557)        (10,000)            --        1,349,014

Nash Hill Associates, Limited                 170,249        (34,449)             --             --          135,800
  Partnership
North Calhoun City, L.P.                       75,938         (9,387)             --             --           66,551
Orange City Plaza, Limited Partnership        375,554             71              --             --          375,625
Puerta del Mar Limited Partnership               --             --(2)         (1,320)         1,320            --

Purvis Heights Properties, L.P.                48,429         13,333          (1,426)            --           60,336
Queen Lane Investors                          205,870        (66,733)         (5,116)            --          134,021
Somerset Manor, Ltd.                             --             --(2)             --             --            --
Sugar Cane Villas, Ltd.                          --             --(2)             --             --            --

Summerfield Apartments Limited                668,381        (35,640)         (5,000)            --          627,741
  Partnership
Sydney Engel Associates L.P.                     --             --(2)             --             --            --

Union Valley Associates Limited                76,327        (30,633)             --             --           45,694
  Partnership
Walnut Grove Family, L.P.                      15,826        (15,826)(1)          --             --            --

Waynesboro Apartments Limited                  55,015        (42,568)             --             --           12,447
  Partnership
West Calhoun City, L.P.                       105,383        (16,282)             --             --           89,101
Westminster Apartments Limited                771,049       (771,049)(1)          --             --            --
  Partnership                             -----------     ----------      -----------     -----------    -----------
                                          $ 8,515,114    $(2,453,590)    $   (36,589)   $     7,457     $  6,032,392
                                          ===========    ===========     ===========    ===========     ============
</TABLE>

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

(2)  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.

                                       29

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.    Investment in Local Partnerships (continued)

      Property information for each Local Partnership as of December 31, 1999 is
as follows:
<TABLE>
<CAPTION>

                                                Mortgage                Buildings and  Accumulated
       Name of Local Partnership              loans payable     Land    improvements   depreciation
       -------------------------              -------------     ----    ------------   ------------

<S>                                           <C>           <C>          <C>          <C>
     April Gardens Apartments II Limited      $ 1,995,920   $  39,984    $ 2,474,445  $(900,878)
       Partnership
     Ashland Park Apartments, L.P.             1,037,908        50,160    1,247,739     (412,108)
     Auburn Family, L.P.                         468,586        20,000      559,613     (177,304)
     Batesville Family, L.P.                   1,438,380        52,000    1,808,219     (564,567)
     Bay Springs Elderly, L.P.                   675,921        38,000      846,080     (263,005)
     Brisas del Mar Apartments Limited         2,652,057       100,280    3,237,383   (1,216,720)
       Partnership
     Bruce Housing Associates, L.P.            1,107,099        16,000    1,441,646     (513,333)
     Carrington Limited Dividend Housing
       Association Limited Partnership         3,412,991       200,000    6,480,320   (2,265,163)
     Chestnut Park Associates, L.P.            5,134,372       781,700    8,654,778   (2,750,150)
     Chowan Senior Manor Associates Limited    1,258,346        86,101    1,513,684     (500,846)
       Partnership
     Christian Street Commons Associates         613,742            --        7,545         (263)
     Country View Apartments                     937,490        35,698    1,215,505     (250,566)
     Desarrollos de Belen Limited              1,884,487        96,190    2,503,941     (599,736)
       Partnership
     Desarrollos de Emaus Limited              3,201,079       214,000    4,039,147     (906,392)
       Partnership
     Ellinwood Heights Apartments, L.P.          688,038        10,000      869,105     (230,188)
     Fulton Street Houses Limited              3,869,930             2    6,014,925   (1,707,348)
       Partnership
     Hayes Run Limited Partnership             1,425,500        85,060    1,494,521     (349,948)
     Howard L. Miller Sallisaw Apartments        615,616        39,000      729,561     (200,951)
       II, L.P.
     Hurlock Meadow Limited Partnership        1,270,656        49,525    1,567,621     (496,595)
     Ivy Family, L.P.                            793,732        11,000    1,045,671     (380,755)
     Justin Associates                         2,422,484        27,472    4,349,750   (1,261,983)
     LaBelle Commons, Ltd.                     1,013,370        98,947    1,184,937     (329,736)
     Lawrence Road Properties, Ltd.              758,834        50,000      929,308     (286,048)
     Loma Del Norte Limited Partnership        1,437,699        84,874    1,785,888     (414,513)
     Long Reach Associates Limited             1,478,729       118,446    1,877,387     (465,541)
       Partnership
     Mirador del Toa Limited Partnership       1,882,326       105,000    2,332,836     (875,410)
     Moore Haven Commons, Ltd.                   928,151        73,645    1,197,000     (413,476)
     NP-89 Limited Dividend Housing
       Association Limited Partnership         4,148,026       150,000    7,410,587   (2,262,372)
     Nash Hill Associates, Limited             1,469,157       123,876    1,693,440     (403,557)
       Partnership
     North Calhoun City, L.P.                    489,654        12,000      632,110     (201,259)
     Orange City Plaza, Limited Partnership      486,007        53,904    1,043,250     (272,571)
     Puerta del Mar Limited Partnership        2,525,101       115,000    3,053,054   (1,162,576)
     Purvis Heights Properties, L.P.           1,146,172        47,000    1,457,715     (428,264)
     Queen Lane Investors                      1,563,392        60,301    2,749,423     (873,639)
     Somerset Manor, Ltd.                        897,825        53,383    1,101,110     (369,232)
     Sugar Cane Villas, Ltd.                   3,308,477        58,500    4,088,461   (1,381,514)
     Summerfield Apartments Limited            1,760,666       195,411    2,686,365     (559,855)
       Partnership
     Sydney Engel Associates L.P.             17,438,225       284,305   19,443,724   (6,411,867)
     Union Valley Associates Limited           1,447,381        97,800    1,757,216     (409,408)
       Partnership
     Walnut Grove Family, L.P.                   847,086        30,000    1,029,505     (323,919)
     Waynesboro Apartments Limited             1,483,359        76,000    1,790,366     (445,441)
       Partnership
     West Calhoun City, L.P.                     769,944        18,000    1,026,277     (317,781)
     Westminster Apartments Limited            1,609,558        51,651    1,058,549     (479,117)
       Partnership                           -----------    ---------- ------------ ------------
                                             $85,793,473    $3,910,215 $113,429,707 $(35,035,895)
                                             ============   ========== ============ ============
</TABLE>

                                       30

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.    Investment in Local Partnerships (continued)

      Property information for each Local Partnership as of December 31, 1998 is
as follows:
<TABLE>
<CAPTION>

                                                Mortgage                Buildings and  Accumulated
       Name of Local Partnership              loans payable     Land    improvements   depreciation
       -------------------------              -------------     ----    ------------   ------------

<S>                                           <C>           <C>          <C>          <C>
     April Gardens Apartments II Limited     $ 2,000,362   $    39,984  $ 2,471,739  $  (809,390)
       Partnership
     Ashland Park Apartments, L.P.             1,040,446        50,160    1,247,739     (366,744)
     Auburn Family, L.P.                         470,555        20,000      558,475     (156,888)
     Batesville Family, L.P.                   1,441,209        52,000    1,808,219     (519,311)
     Bay Springs Elderly, L.P.                   677,420        38,000      843,018     (232,319)
     Brisas del Mar Apartments Limited         2,658,737       100,280    3,227,091   (1,080,780)
       Partnership
     Bruce Housing Associates, L.P.            1,110,021        16,000    1,420,798     (459,525)
     Carrington Limited Dividend Housing
       Association Limited Partnership         3,440,212       200,000    6,369,080   (2,037,049)
     Chestnut Park Associates, L.P.            5,189,118       781,700    8,654,778   (2,436,107)
     Chowan Senior Manor Associates Limited    1,263,410        86,101    1,513,684     (437,796)
       Partnership
     Christian Street Commons Associates         620,521            --           --           --
     Country View Apartments                     939,775        35,698    1,215,505     (216,511)
     Desarrollos de Belen Limited              1,887,073        96,190    2,493,144     (514,569)
       Partnership
     Desarrollos de Emaus Limited              3,205,734       214,000    4,034,206     (771,217)
       Partnership
     Ellinwood Heights Apartments, L.P.          689,658        10,000      864,434     (214,607)
     Fulton Street Houses Limited              3,869,930             2    5,987,214   (1,480,023)
       Partnership
     Hayes Run Limited Partnership             1,428,831        85,060    1,488,176     (311,322)
     Howard L. Miller Sallisaw Apartments        616,935        39,000      726,868     (188,000)
       II, L.P.
     Hurlock Meadow Limited Partnership        1,273,910        49,525    1,562,361     (440,694)
     Ivy Family, L.P.                            798,004        11,000    1,044,294     (342,231)
     Justin Associates                         2,454,251        27,472    4,344,154   (1,102,275)
     LaBelle Commons, Ltd.                     1,015,893        98,947    1,184,937     (286,545)
     Lawrence Road Properties, Ltd.              760,577        50,000      929,308     (262,417)
     Loma Del Norte Limited Partnership        1,440,903        84,874    1,775,054     (362,224)
     Long Reach Associates Limited             1,482,023       118,446    1,877,387     (412,940)
       Partnership
     Mirador del Toa Limited Partnership       1,887,322       105,000    2,329,996     (778,399)
     Moore Haven Commons, Ltd.                   930,338        73,645    1,197,000     (371,491)
     NP-89 Limited Dividend Housing
       Association Limited Partnership         4,230,637       150,000    7,366,559   (2,006,241)
     Nash Hill Associates, Limited             1,472,616       123,876    1,676,137     (356,912)
       Partnership
     North Calhoun City, L.P.                    492,669        12,000      632,110     (177,773)
     Orange City Plaza, Limited Partnership      508,823        53,904    1,041,636     (238,998)
     Puerta del Mar Limited Partnership        2,531,462       115,000    3,046,045   (1,033,339)
     Purvis Heights Properties, L.P.           1,149,032        47,000    1,455,334     (397,101)
     Queen Lane Investors                      1,572,111        60,301    2,742,479     (771,356)
     Somerset Manor, Ltd.                        899,846        53,383    1,099,816     (328,500)
     Sugar Cane Villas, Ltd.                   3,315,958        58,500    4,088,461   (1,231,318)
     Summerfield Apartments Limited            1,784,586       195,411    2,684,961     (488,319)
       Partnership
     Sydney Engel Associates L.P.             17,635,198       284,305   19,443,724   (5,701,503)
     Union Valley Associates Limited           1,450,664        97,800    1,757,216     (364,895)
       Partnership
     Walnut Grove Family, L.P.                   848,821        30,000    1,017,192     (283,400)
     Waynesboro Apartments Limited             1,486,904        76,000    1,790,366     (400,847)
       Partnership
     West Calhoun City, L.P.                     776,927        18,000    1,024,405     (277,570)
     Westminster Apartments Limited            1,609,558        51,651    1,025,737     (408,129)
       Partnership                           -----------   -----------  ----------- ------------
                                             $86,358,980   $ 3,910,215 $113,060,837 $(31,057,575)
                                             ===========   =========== ============ ============
</TABLE>


                                       31

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


5.  Investment in Local Partnerships (continued)

    The summary of property  activity during the year ended December 31, 1999 is
as follows:
<TABLE>
<CAPTION>

                                                              Net change
                                        Balance as of       during the year
                                         December 31,            ended             Balance as of
                                            1998           December 31, 1999     December 31, 1999
                                            ----           -----------------     -----------------

<S>                                    <C>                   <C>                 <C>
     Land                              $   3,910,215         $      --           $  3,910,215
     Buildings and improvements          113,060,837           368,870            113,429,707
                                         116,971,052           368,870            117,339,922
     Accumulated depreciation            (31,057,575)       (3,978,320)           (35,035,895)
                                         $85,913,477      $ (3,609,450)          $ 82,304,027
</TABLE>

6.  Transactions with General Partner and Affiliates

    For the years ended March 30,  2000,  1999 and 1998,  the  Partnership  paid
    and/or  incurred  the  following  amounts  to  the  General  Partner  and/or
    affiliates in connection with services provided to the Partnership:
<TABLE>
<CAPTION>

                                               2000                 1999                 1998
                                          Paid     Incurred     Paid    Incurred     Paid     Incurred
                                          ----     --------     ----    --------     ----     --------

<S>                                   <C>         <C>        <C>        <C>        <C>       <C>
      Management fees (see Note 8)     $ 100,000  $ 230,571  $ 100,000  $ 230,571 $ 100,000  $ 230,571

      Administration fees (see Note 8) $   2,699  $  57,347  $      --  $     --  $      --  $      --

For the years ended  December 31, 1999,  1998 and 1997,  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:


                                              1999                 1998                  1997
                                         Paid     Incurred     Paid     Incurred     Paid     Incurred
                                         ----     --------     ----     --------     ----     --------
<S>                                   <C>         <C>        <C>        <C>        <C>       <C>

      Property management fees         $ 129,665  $ 131,724  $ 109,732  $ 130,570  $ 112,083  $ 127,518

      Insurance and other services        15,009     15,275     23,117     34,455     22,079     22,079

</TABLE>


                                       32

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


7.  Taxable Loss

    A reconciliation of the financial  statement net loss of the Partnership for
    the years ended March 30, 2000, 1999 and 1998 to the tax return net loss for
    the years ended December 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                        2000              1999               1998
                                                        ----              ----               ----
     Financial   statement  net  loss  for  the
<S>          <C>                                     <C>               <C>                <C>
       years  ended  March 30,  2000,  1999, and      $(2,035,647)      $(2,756,082)       $(2,649,323)
       1998

     Add (less) net transactions occurring
     between
        January 1, 1997 and March 30, 1997                     --                --            (58,090)
        January 1, 1998 and March 30, 1998                     --           (76,012)            76,012
        January 1, 1999 and March 30, 1999                (90,310)           90,310                 --
        January 1, 2000 and March 30, 2000                 64,238                --                 --
                                                     ------------       -----------        -----------
     Adjusted financial statement net loss for
       the years ended December 31, 1999, 1998         (2,061,719)       (2,741,784)        (2,631,401)
       and 1997

     Adjustment to management and
       administration fees pursuant to
       Internal Revenue Code Section 267                  144,150           130,571            130,571

     Differences arising from equity in
       loss of investment in local                     (1,468,355)         (903,119)          (718,329)
       partnerships

     Interest revenue                                         677           210,630            (208,732)

     Other differences                                    (13,965)           (9,629)             (5,367)
                                                     ------------       -----------        -----------
     Tax return net loss for the years
       ended December 31, 1999, 1998 and 1997        $ (3,399,212)      $(3,313,331)        $(3,433,258)
                                                     ============       ===========         ===========
</TABLE>

The  differences  between  the  investment  in  local  partnerships  for tax and
financial reporting purposes as of December 31, 1999 and 1998 are as follows:

                                                          1999           1998
                                                          ----           ----

     Investment in local partnerships - financial      $4,450,322     $6,027,711
     reporting
     Investment in local partnerships - tax             1,007,401      4,279,897
                                                       ----------     ----------
                                                       $3,442,921     $1,747,814
                                                       ==========     ==========

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


                                       33

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


8.    Commitments and Contingencies

      Pursuant to the Partnership Agreement,  the Partnership is required to pay
      the General  Partner an annual  management fee  ("Management  Fee") and an
      annual  additional  management fee  ("Additional  Management Fee") for its
      services  in  connection  with  the  management  of  the  affairs  of  the
      Partnership,  subject to certain provisions of the Partnership  Agreement.
      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 $161,400
      for each of the three years ended March 30,  2000.  The annual  Additional
      Management  Fee is  equal  to .06% of  Invested  Assets.  The  Partnership
      incurred  an  Additional  Management  Fee of $69,171 for each of the three
      years ended March 30, 2000.  Such  amounts are  aggregated  and  reflected
      under  the  caption   management  fees  in  the   accompanying   financial
      statements.  Unpaid Management Fees and Additional  Management Fees in the
      amount of  $1,191,756  and  $1,061,185  are included in payable to general
      partner and affiliate in the  accompanying  balance sheets as of March 30,
      2000 and 1999, respectively.

      In addition,  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"),  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 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.   Pursuant  to  such  agreement,  the
      Partnership   is   required   to  pay   an   annual   administration   fee
      ("Administration  Fee")  and  an  annual  additional   administration  fee
      ("Additional  Administration Fee") for administrative services provided to
      the  Partnership.  The  annual  Administration  Fee is  equal  to  .14% of
      Invested  Assets.  The  Partnership  incurred  an  Administration  Fee  of
      $161,400  for each of the three  years ended  March 30,  2000.  The annual
      Additional  Administration  Fee is subject to  certain  provisions  of the
      Partnership  Agreement  and is  equal  to .06%  of  Invested  Assets.  The
      Partnership incurred an Additional  Administration Fee of $69,171 for each
      of the three years ended March 30, 2000.  Such amounts are  aggregated and
      reflected  under  the  caption  administration  fees  in the  accompanying
      financial   statements.   Unpaid   Administration   Fees  and   Additional
      Administration Fees due to MLFA in the amount of $1,136,673 and $1,061,185
      are included in accounts  payable and accrued expenses in the accompanying
      balance  sheets  as of March  30,  2000  and  1999,  respectively.  Unpaid
      Administration Fees and Additional Administration Fees due to an affiliate
      of the General Partner in the cumulative amount of $54,648 are included in
      due to general partner and affiliate in the accompanying  balance sheet as
      of March 30, 2000.

      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  during  and after the
      Compliance  Periods of the Local  Partnerships.  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 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 renewal under current HUD guidelines.

      The  Partnership is a defendant in a complaint  brought in connection with
      the alleged wrongful  interference with economic advantage  resulting from
      the  delay of the  Partnership  in  providing  a list of Unit  holders  to
      facilitate  a  tender  offer  by  plaintiff.   The  plaintiff  is  seeking
      compensatory  damages of approximately  $246,000 and unspecified  punitive
      damages.  The parties  have  proceeded  with  discovery.  The  Partnership
      believes it has valid  defenses and,  accordingly,  no adjustment has been
      made to the accompanying financial statements for the potential outcome of
      this uncertainty.


                                       34

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2000, 1999 AND 1998


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.

      Interest receivable

      The  carrying  amount  approximates  fair  value  due to the  terms of the
underlying investments.


      The estimated fair value of the Partnership's  financial instruments as of
      March  30,  2000  and  1999  are  disclosed  elsewhere  in  the  financial
      statements.


                                       35

<PAGE>

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

None

                                    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 directors
of Richman Housing are:

                           Served in present
Name                       Capacity since (1)      Position held
----                       ----------------        -------------

Richard Paul Richman       September 21, 1989      President and Director
Neal Ludeke                September 21, 1989      Vice President and Treasurer
David A. Salzman           September 21, 1989      Vice President
Gina S. Scotti             September 21, 1989      Secretary

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

Richard Paul  Richman,  age 52, is the sole  Director  and  President of Richman
Housing.  Mr.  Richman is the  President and  principal  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.

Neal Ludeke,  age 42, is a Vice President and the Treasurer of Richman  Housing.
Mr.  Ludeke,  a Vice  President and 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 advisory services provided to a
small business investment company and various partnership management functions.

David A. Salzman,  age 39, is a Vice President of Richman Housing and a minority
stockholder of Richman Group. Mr. Salzman is responsible for the acquisition and
development  of residential  real estate for  syndication as a Vice President of
acquisitions of Richman Group.

Gina S. Scotti,  age 44, is the  Secretary of Richman  Housing.  Ms. Scotti is a
Vice President and the Secretary of Richman  Group.  As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.


Item 11. Executive Compensation

Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman  Housing any  remuneration.  During the year ended March 30,
2000, Richman Housing did not pay any remuneration to any of its officers or its
director.


Item 12. Security Ownership of Certain Beneficial Owners and Management

As of June 1,  2000,  no  person or entity  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.


                                       36

<PAGE>

Item 13. Certain Relationships and Related Transactions

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.

Transactions with General Partner and Affiliates

The net tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 1999  allocated to the General  Partner were $33,992 and
$56,042,  respectively.  The net tax losses and Low-income Tax Credits generated
by the  General  Partner  during  the year  ended  December  31,  1999 (from the
allocation of Registrant  discussed above) and allocated to Richman Housing were
$27,458 and $45,299, respectively.

Indebtedness of Management.

No officer or director of the General  Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 2000.


                                       37

<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

   (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
<TABLE>
<CAPTION>

                                                         Incorporated by
                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    10.1       April Gardens Apartments II Limited       Exhibit 10.1 to Form 10-Q Report
               Partnership (A Delaware Limited           dated December 30, 1990
               Partnership) Amended and Restated         (File No. 33-31390)
               Agreement of Limited Partnership

    10.2       Ashland Park Apartments, L.P. Second      Exhibit 10.2 to Form 10-K Report
               Amended and Restated Agreement of         dated March 30, 1991
               Limited Partnership                       (File No. 33-31390)

    10.3       Auburn Family, L.P. Amended and           Exhibit 10.1 to Form 10-Q Report
               Restated Limited Partnership Agreement    dated December 31, 1991
               and Certificate of Limited Partnership    (File No. 0-19217)

    10.4       Amended No. 2 to the Batesville Family,   Exhibit 10.2 to Form 10-Q Report
               L.P. Amended and Restated Agreement of    dated December 30, 1990
               Limited Partnership                       (File No. 33-31390)

    10.5       Batesville Family, L.P. Amendment No. 3   Exhibit 10.2 to Form 10-Q Report
               to the Amended and Restated Agreement     dated December 31, 1991
               of Limited Partnership                    (File No. 0-19217)

    10.6       Bay Springs Elderly, L.P. (A              Exhibit 10.1 to Form 10-Q Report
               Mississippi Limited Partnership)          dated September 29, 1991
               Amended and Restated Limited              (File No. 0-19217)
               Partnership Agreement and Certificate
               of Limited Partnership

    10.7       Brisas del Mar Apartments Limited         Exhibit 10.3 to Form 10-Q Report
               Partnership (A Delaware Limited           dated December 30, 1990
               Partnership) Amended and Restated         (File No. 33-31390)
               Agreement of Limited Partnership

    10.8       Amendment No. 1 to the Bruce Housing      Exhibit 10.8 to Form 10-K Report
               Associates, L.P. Amended and Restated     dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)


                                       38

<PAGE>

                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    10.9       Amendment No. 2 to the Bruce Housing      Exhibit 10.4 to Form 10-Q Report
               Associates, L.P. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)

    10.10      Bruce Housing Associates, L.P.            Exhibit 10.3 to Form 10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership

    10.11      Carrington Limited Dividend Housing       Exhibit 10.1 to Form 10-Q Report
               Association Limited Partnership Amended   dated September 29, 1990
               and Restated Agreement of Limited         (File No. 33-31390)
               Partnership

    10.12      Carrington Limited Dividend Housing       Exhibit 10.2 to Form 10-Q Report
               Association Limited Partnership Second    dated September 29, 1990
               Amended and Restated Agreement of         (File No. 33-31390)
               Limited Partnership

    10.13      Carrington Limited Dividend Housing       Exhibit 10.5 to Form 10-Q Report
               Association Limited Partnership           dated December 30, 1990
               Amendment No. 1 to the Second Amended     (File No. 33-31390)
               and Restated Agreement of Limited
               Partnership

    10.14      Chestnut Park Associates, L.P. Amended    Exhibit 10.3 to Form 10-Q Report
               and Restated Agreement of Limited         dated September 29, 1990
               Partnership                               (File No. 33-31390)

    10.15      Chowan Senior Manor Associates Limited    Exhibit 10.15 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.16      Christian Street Commons Associates       Exhibit 10.16 to Form 10-K Report
               Amended and Restated Limited              dated March 30, 1992
               Partnership Agreement and Certificate     (File No. 33-31390)
               of Limited Partnership

    10.17      Country View Apartments Second Amended    Exhibit 10.17 to Form 10-K Report
               and Restated Limited Partnership          dated March 30, 1992
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership

    10.18      Desarrollos de Belen Limited              Exhibit 10.18 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.19      Desarrollos de Emaus Limited              Exhibit 10.19 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.20      Ellinwood Heights Apartments, L.P.        Exhibit 10.1 to Form 10-Q Report
               Amended and Restated Agreement of         dated June 29, 1991
               Limited Partnership                       (File No. 0-19217)

                                       39

<PAGE>

                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    10.21      Fulton Street Houses Limited              Exhibit 10.21 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.22      Hayes Run Limited Partnership Amended     Exhibit 10.2 to Form 10-Q Report
               and Restated Agreement of Limited         dated June 29, 1991
               Partnership                               (File No. 0-19217)

    10.23      Howard L. Miller Sallisaw Apartments      Exhibit 10.10 to Form 10-K Report
               II, L.P. Third Amended and Restated       dated March 30, 1991
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership

    10.24      Hurlock Meadow Limited Partnership        Exhibit 10.24 to Form 10-K Report
               Amended and Restated Limited              dated March 30, 1992
               Partnership Agreement                     (File No. 33-31390)

    10.25      Amendment No. 1 to the Ivy Family, L.P.   Exhibit 10.6 to Form 10-Q Report
               Amended and Restated Agreement of         dated December 30, 1990
               Limited Partnership                       (File No. 33-31390)

    10.26      Ivy Family, L.P. Amendment No. 3 to the   Exhibit 10.4 to Form 10-Q Report
               Amended and Restated Agreement of         dated December 31, 1991
               Limited Partnership                       (File No. 0-19217)

    10.27      Justin Associates Amended and Restated    Exhibit 10.7 to Form 10-Q Report
               Agreement and Certificate of Limited      dated December 30, 1990
               Partnership                               (File No. 33-31390)

    10.28      LaBelle Commons, Ltd. Amended and         Exhibit 10.13 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1991
               Partnership                               (File No. 33-31390)

    10.29      LaBelle Commons, Ltd. Amendment No. 1     Exhibit 10.29 to Form 10-K Report
               to Amended and Restated Agreement of      dated March 30, 1992
               Limited Partnership                       (File No. 33-31390)

    10.30      Amendment No. 2 to the Lawrence Road      Exhibit 10.8 to Form 10-Q Report
               Properties, Ltd. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)

    10.31      Lawrence Road Properties, Ltd.            Exhibit 10.5 to Form 10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership

    10.32      Loma Del Norte Limited Partnership        Exhibit 10.2 to Form 10-Q Report
               Amended and Restated Limited              dated September 29, 1991
               Partnership Agreement                     (File No. 0-19217)

    10.33      Long Reach Associates Limited             Exhibit 10.15 to Form 10-K Report
               Partnership Sixth Amended and Restated    dated March 30, 1991
               Agreement of Limited Partnership          (File No. 33-31390)

                                       40

<PAGE>

                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    10.34      Mirador del Toa Limited Partnership       Exhibit 10.16 to Form 10-K Report
               Amended and Restated Agreement of         dated March 30, 1991
               Limited Partnership                       (File No. 33-31390)

    10.35      Amendment No. 1 to the Mirador del Toa    Exhibit 10.17 to Form 10-K Report
               Limited Partnership Amended and           dated March 30, 1991
               Restated Agreement of Limited             (File No. 33-31390)
               Partnership

    10.36      Moore Haven Commons, Ltd. Amended and     Exhibit 10.9 to Form 10-Q Report
               Restated Agreement of Limited             dated December 30, 1990
               Partnership                               (File No. 33-31390)

    10.37      NP-89 Limited Dividend Housing            Exhibit 10.3 to Form 10-Q Report
               Association Limited Partnership Second    dated June 29, 1991
               Restated and Amended Agreement of         (File No. 0-19217)
               Limited Partnership

    10.38      Nash Hill Associates, Limited             Exhibit 10.37 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.39      North Calhoun City, L.P. (A Mississippi   Exhibit 10.3 to Form 10-Q Report
               Limited Partnership) Amended and          dated September 29, 1991
               Restated Limited Partnership Agreement    (File No. 0-19217)
               and Certificate of Limited Partnership

    10.40      Orange City Plaza, Limited Partnership    Exhibit 10.40 to Form 10-K Report
               Amended and Restated Partnership          dated March 30, 1992
               Agreement                                 (File No. 33-31390)

    10.41      Puerta del Mar Limited Partnership (A     Exhibit 10.10 to Form 10-Q Report
               Delaware Limited Partnership) Amended     dated December 30, 1990
               and Restated Agreement of Limited         (File No. 33-31390)
               Partnership

    10.42      Amendment No. 2 to the Purvis Heights     Exhibit 10.11 to Form 10-Q Report
               Properties, L.P. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)

    10.43      Purvis Heights Properties, L.P.           Exhibit 10.6 to Form 10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership

    10.44      Queen Lane Investors Amendment No. 1 to   Exhibit 10.12 to Form 10-Q Report
               Amended and Restated Agreement and        dated December 30, 1990
               Certificate of Limited Partnership        (File No. 33-31390)

    10.45      Somerset Manor, Ltd. Amended and          Exhibit 10.13 to Form 10-Q Report
               Restated Agreement and Certificate of     dated December 30, 1990
               Limited Partnership                       (File No. 33-31390)

    10.46      Sugar Cane Villas, Ltd. Amended and       Exhibit 10.23 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1991
               Partnership                               (File No. 33-31390)


                                       41

<PAGE>

                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    10.47      Summerfield Apartments Limited            Exhibit 10.47 to Form 10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    10.48      Amendment No.1 to the Summerfield         Exhibit 10.48 to Form 10-K Report
               Apartments Limited Partnership Amended    dated March 30, 1999
               and Restated Agreement of Limited         (File No. 0-19217)
               Partnership

    10.49      Sydney Engel Associates Second Amended    Exhibit 10.4 to Form 10-Q Report
               and Restated Agreement of Limited         dated September 29, 1990
               Partnership                               (File No. 33-31390)

    10.50      First Amendment to Second Amended and     Exhibit 10.49 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1997
               Partnership of Sydney Engel Associates    (File No. 0-19217)

    10.51      Second Amendment to Second Amended and    Exhibit 10.50 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1997
               Partnership of Sydney Engel Associates    (File No. 0-19217)
               L.P.

    10.52      Third Amendment to Second Amended and     Exhibit 10.51 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1997
               Partnership of Sydney Engel Associates    (File No. 0-19217)
               L.P.

    10.53      Fourth Amendment to Second Amended and    Exhibit 10.52 to Form 10-K Report
               Restated Agreement of Limited             dated March 30, 1997
               Partnership of Sydney Engel Associates    (File No. 0-19217)
               L.P.

    10.54      Union Valley Associates Limited           Exhibit 10.14 to Form 10-Q Report
               Partnership Amended and Restated          dated December 30, 1990
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership

    10.55      Walnut Grove Family, L.P. (A              Exhibit 10.4 to Form 10-Q Report
               Mississippi Limited Partnership)          dated September 29, 1991
               Amended and Restated Limited              (File No. 0-19217)
               Partnership Agreement and Certificate
               of Limited Partnership

    10.56      Waynesboro Apartments Limited             Exhibit 10.15 to Form 10-Q Report
               Partnership Amended and Restated          dated December 30, 1990
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership

    10.57      West Calhoun City, L.P. (A Mississippi    Exhibit 10.5 to Form 10-Q Report
               Limited Partnership) Amended and          dated September 29, 1991
               Restated Limited Partnership Agreement    (File No. 0-19217)
               and Certificate of Limited Partnership

    10.58      Westminster Apartments Limited            Exhibit 10.53 to Form 10-K Report
               Partnership Second Amended and Restated   dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)

    27         Financial Data Schedule

                                       42

<PAGE>

                         Exhibit                         Reference to
                         -------                         ------------

<S> <C>         <C>                                       <C>
    28.0       Pages 20 through 31, 44 through 71       Exhibit  28.0 to Form 10-K Report
               and 78 through 80 of  Prospectus         dated  March 30, 1990
               filed pursuant to Rule 424(b)(3)         (File No. 33-31390)
               under Securities Act of 1933

    28.1       Pages 14 through 19 of Prospectus        Exhibit 28.1 to Form 10-K Report
               filed pursuant to Rule 424(b)(3)         dated March 30, 1991
               under Securities Act of 1933             (File No. 33-31390)

    28.2       Supplement No. 1 dated June 6, 1990 to    Exhibit 28.2 to Form 10-K Report
               Prospectus                                dated March 30, 1991
                                                         (File No. 33-31390)

    28.3       Supplement No. 2 dated November 21,       Exhibit 28.3 to Form 10-K Report
               1990 to Prospectus                        dated March 30, 1991
                                                         (File No. 33-31390)

    28.4       Supplement No. 3 dated December 20,       Exhibit 28.4 to Form 10-K Report
               1990 to Prospectus                        dated March 30, 1991
                                                         (File No. 33-31390)

    28.5       Supplement No. 4 dated October 30, 1991   Exhibit 28.5 to Form 10-K Report
               to Prospectus                             dated March 30, 1992
                                                         (File No. 33-31390)

    28.6       Supplement No. 5 dated December 26,       Exhibit 28.6 to Form 10-K Report
               1991 to Prospectus                        dated March 30, 1992
                                                         (File No. 33-31390)

    28.7       Supplement No. 6 dated January 15, 1992   Exhibit 28.7 to Form 10-K Report
               to Prospectus                             dated March 30, 1990
                                                         (File No. 33-31390)
</TABLE>

   (b) Reports on Form 8-K

   No reports on Form 8-K were filed by  Registrant  during the last  quarter of
   the period covered by this report.

   (c) Exhibits

   See (a)(3) above.

(d)     Financial Statement Schedules

   See (a)(2) above.


                                       43

<PAGE>


                                   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:  June 28, 2000                /s/ Richard Paul Richman
        -------------                ------------------------
                                     by: Richard Paul Richman
                                         President

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/ Richard Paul Richman       President, Chief Executive     June 28, 2000
    ---------------------------    Officer and Director
        (Richard Paul Richman)     of the general partner
                                   of the General Partner

    /s/ Neal Ludeke                Vice President and             June 28, 2000
    ---------------------------    Treasurer of the
    (Neal Ludeke)                  general partner of the
                                   General Partner
                                   (Principal Financial
                                   and Accounting Officer
                                   of Registrant)


                                       44