10-K
                                  Annual Report

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

                                    FORM 10-K
                                   (Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
                              ended March 30, 1999

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

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 and Taxpayer Relief Act
of 1997 (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.



<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 required holding period of each Property,
in order to avoid  Low-income  Tax Credit  recapture,  is fifteen years from the
year in which the  Low-income  Tax Credits  commence on the last building of the
Property  (the  "Compliance  Period").   In  addition,   certain  of  the  Local
Partnerships  have entered into  agreements  with the relevant  state tax credit
agencies whereby the Local  Partnerships  must maintain the low-income nature of
the Properties for a period which exceeds the Compliance  Period,  regardless of
any sale of the  Properties  by the  Local  Partnerships  after  the  Compliance
Period.  The  Properties  must  satisfy  various  requirements   including  rent
restrictions   and  tenant  income   limitations  (the  "Low-income  Tax  Credit
Requirements")  in order to  maintain  eligibility  for the  recognition  of the
Low-income  Tax Credit at all times during the Compliance  Period.  Once a Local
Partnership has become eligible for the Low-income Tax Credit,  it may lose such
eligibility  and suffer an event of recapture if its Property fails to remain in
compliance  with the Low-income Tax Credit  Requirements.  Through  December 31,
1998,  none of the Local  Partnerships  have  suffered an event of  recapture of
Low-income Tax Credits.

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:

<TABLE>
<CAPTION>
                         <S>                                         <C>                             <C>
                                                                 Registrant                        ATCP II
                                                                 ----------                        -------
               Batesville Family, L.P.                              61.75%                            37.25%
               Bruce Housing Associates, L.P.                       61.75                             37.25
               Carrington Limited Dividend Housing
                 Association Limited Partnership                    65.95                             33.05
               Ivy Family, L.P.                                     61.75                             37.25
               Lawrence Road Properties, Ltd.                       61.75                             37.25
               Mirador del Toa Limited Partnership                  59.06                             39.94
               Purvis Heights Properties, L.P.                      61.75                             37.25
               Queen Lane Investors                                 48.50                             50.50
</TABLE>

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.  In  October  1997,  Congress  passed  the  Multifamily
Assisted  Housing and Reform and  Affordability  Act,  whereby the United States
Department of Housing and Urban  Development  ("HUD") was given the authority to
renew certain  project based  Section 8 contracts  expiring  during HUD's fiscal
year  1998,  where  requested  by an  owner,  for an  additional  one year  term
generally at or below  current rent levels,  subject to certain  guidelines.  In
October  1998,  HUD  issued a  directive  related  to  project  based  Section 8
contracts   expiring  during  HUD's  fiscal  year  1999  which  defines  owners'
notification  responsibilities,  advises  owners  of  project  based  Section  8
properties  of what  their  options  are  regarding  the  renewal  of  Section 8
contracts,  provides  guidance  and  procedures  to owners,  management  agents,
contract administrators and HUD staff on renewing Section 8 contracts,  provides
guidance on setting  renewal  rents and  handling  renewal  rent  increases  and
provides 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 scheduled to expire in 1999.


<PAGE>


<TABLE>
<CAPTION>
Item 2.  Properties (continued)
<S>                                             <C>                      <C>                   <C>                    <C>
                                                                                           Mortgage
Name of Local Partnership                       Number                                loans payable as of           Subsidy
Name of apartment complex                      of rental                Capital           December 31,                (see
Apartment complex location                       units                contribution            1998                  footnotes)
-------------------------------                ---------              ------------    -----------------          -----------

April Gardens Apartments II
  Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico                          48                 $   485,581             $  2,000,362                (1b&d)

Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska                                 24                     235,732                1,040,446                (1b&d)

Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi                           16                      95,412                  470,555                (1b&d)

Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi                           48                     239,716 (2)            1,441,209                  (1b)

Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi                          24                     208,820                  677,420                (1b&d)

Brisas del Mar Apartments
  Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico                              66                     668,172                2,658,737                (1b&d)

Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi                                40                     183,155 (2)            1,110,021                (1b&d)

Carrington Limited Dividend
  Housing Association Limited
  Partnership
Carrington Place
Farmington Hills, Michigan                        100                  2,174,720 (2)            3,440,212                  (1c)

Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey                           59                   4,204,576                5,189,118                  (1a)

Chowan Senior Manor Associates
  Limited Partnership
Azalea Garden Senior Manor
  Apartments
Murfreesboro, North Carolina                      33                     278,405                1,263,410                (1b&d)

Christian Street Commons
  Associates
Christian Street Commons
  Apartments
Philadelphia, Pennsylvania                        18                     581,645                  620,521                (1a&b)

</TABLE>


<PAGE>


<TABLE>
<CAPTION>
Item 2.  Properties (continued)
<S>                                              <C>                       <C>                   <C>                 <C>
                                                                                             Mortgage
Name of Local Partnership                       Number                                  loans payable as of       Subsidy
Name of apartment complex                      of rental            Capital                December 31,            (see
Apartment complex location                       units           contribution                  1998             footnotes)
------------------------------                 ---------        --------------        ---------------------     ----------

Country View Apartments
Country View Apartments
Pembroke, Maine                                   16           $     279,183                 $  939,775              (1b&d)

Desarrollos de Belen Limited
  Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico                         41                 422,929                  1,887,073              (1b&d)

Desarrollos de Emaus Limited
  Partnership
Hucares II Apartments
Naguabo, Puerto Rico                              72                 631,404                  3,205,734              (1b&d)

Ellinwood Heights Apartments, L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas                                 24                 156,261                    689,658              (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                  1,428,831              (1b&d)

Howard L. Miller Sallisaw
  Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma                                24                 130,158                    616,935              (1b&d)

Hurlock Meadow Limited
  Partnership
Hurlock Meadow Apartments
Hurlock, Maryland                                 30                 284,218                  1,273,910              (1b&d)

Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi                           32                 135,528 (2)                798,004              (1b&d)

Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania                        40               1,809,723                  2,454,251              (1b&e)

LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida                                  32                 253,580                  1,015,893              (1b&d)

Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi                               24                 123,799 (2)                760,577              (1b&d)
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
Item 2.  Properties (continued)
<S>                                                <C>                      <C>               <C>                   <C>
                                                                                            Mortgage
Name of Local Partnership                       Number                                  loans payable as of       Subsidy
Name of apartment complex                      of rental                Capital            December 31,            (see
Apartment complex location                       units               contribution              1998             footnotes)
---------------------------------------        ---------             ------------       -------------------     ----------

Loma Del Norte Limited
  Partnership
Loma Del Norte Apartments
Anthony, New Mexico                               40              $  314,865           $   1,440,903                 (1b&d)

Long Reach Associates Limited
  Partnership
Oak Ridge Apartments
Bath, Maine                                       30                 448,922               1,482,023                 (1b&d)

Mirador del Toa Limited
  Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico                             48                 284,847 (2)           1,887,322                 (1b&d)

Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida                              28                 213,402                 930,338                 (1b&d)

NP-89 Limited Dividend Housing
  Association Limited Partnership
Newport Apartments
Clinton Township, Michigan                        168                2,372,292             4,230,637               (1a,b&g)

Nash Hill Associates, Limited
  Partnership
Nash Hill Place
Williamsburg, Massachusetts                       28                   302,575             1,472,616               (1b,d&f)

North Calhoun City, L.P.
North Calhoun City Apartments
Calhoun City, Mississippi                         18                   146,565               492,669                 (1b&d)

Orange City Plaza, Limited
  Partnership
Orange City Plaza Apartments
Orange City, Iowa                                 32                   456,090               508,823                   (1a)

Puerta del Mar Limited Partnership
Puerta del Mar Apartments
Hatillo, Puerto Rico                              66                   630,570             2,531,462                 (1b&d)

Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi                               40                   191,512 (2)         1,149,032                   (1b)

Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania                        29                   597,050 (2)         1,572,111                 (1b&e)

Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania                        24                   208,465               899,846                 (1b&d)

Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida                                  87                   751,560             3,315,958                 (1b&d)
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
Item 2.  Properties (continued)
<S>                                               <C>                    <C>                     <C>                   <C>
                                                                                             Mortgage
Name of Local Partnership                        Number                                 loans payable as of       Subsidy
Name of apartment complex                         of                  Capital              December 31,            (see
Apartment complex location                      rental             Contribution                1998             footnotes)
---------------------------------------         -------           --------------        -------------------     ----------

Summerfield Apartments Limited
  Partnership
Summerfield Apartments
Charlotte, North Carolina                          52          $   1,088,667            $   1,784,586                  (1b)

Sydney Engel Associates L.P.
(formerly known as Sydney Engel
  Associates)
The Castle
New York, New York                                224              3,201,874               17,635,198                  (1b)

Union Valley Associates Limited
  Partnership
Union Valley Apartments
Union Township, Pennsylvania                       36                371,589                1,450,664                  (1b)

Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi                          24                191,695                  848,821                (1b&d)

Waynesboro Apartments Limited
  Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania                           36                360,859                1,486,904                  (1b)

West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi                          28                230,212                  776,927                (1b&d)

Westminster Apartments Limited
  Partnership
Westminster Apartments
Philadelphia, Pennsylvania                         42              1,047,993                1,609,558                (1a&b)
                                                                  -----------             -----------
                                                                $  29,264,476            $ 86,358,980
                                                                  ===========             ===========
</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 scheduled to
              expire in  1999.

     (2) Reflects amount attributable to Registrant only.


<PAGE>



Item 3.  Legal Proceedings

Registrant is not aware of any material legal proceedings.

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

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


<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 May 5, 1999 was
1,624, 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, 1999 and 1998.

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, 1998 and 1997 and the  cumulative  Low-income  Tax
Credits allocated from inception through December 31, 1998 are as follows:
<TABLE>
<CAPTION>
                              <S>                                         <C>

                                                                          Low-income
                                                                         Tax Credits
                                                                         -----------

                       Tax year ended December 31, 1998                   $  154.46
                       Tax year ended December 31, 1997                      153.74
                       Cumulative totals                                  $1,145.48
</TABLE>

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.



<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>
<S>                                        <C>             <C>                  <C>                <C>               <C>
                                                                    Years Ended March 30,

                                       1999               1998                1997                 1996                1995
                                    -----------         -----------        -----------          -----------        -----------
Interest and other revenue          $   252,224         $   257,645        $   317,065          $   335,724        $   326,184
                                    ===========         ===========        ===========          ===========        ===========
Equity in loss of investment in
   local partnerships               $(2,453,590)        $(2,358,431)       $(2,509,806)         $(3,249,195)       $(3,396,272)
                                    ===========         ===========        ===========          ===========        ===========
Net loss                            $(2,756,082)        $(2,649,323)       $(2,718,536)         $(3,443,977)       $(3,611,978)
                                    ===========         ===========        ===========          ===========        ===========
Net loss per unit of limited
   partnership interest             $    (76.04)        $    (73.09)       $    (75.00)         $    (95.02)       $    (99.65)
                                    ===========         ===========        ===========          ===========        ===========

                                                                       As of March 30,
                                    ------------------------------------------------------------------------------------------
                                       1999                1998               1997                 1996                1995
                                    -----------         -----------        -----------          -----------        -----------
Total assets                        $ 9,511,546         $12,106,269        $15,503,629          $17,832,235        $21,199,982
                                    ===========         ===========        ===========          ===========        ===========
</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, 1999,  Registrant has cash and cash  equivalents and investments
in bonds  totaling  $3,457,623,  which is available  for  operating  expenses of
Registrant  and  circumstances  which  may  arise in  connection  with the Local
Partnerships.  As of March 30, 1999, Registrant's investments in bonds represent
corporate  bonds of $1,776,815 and U.S.  Treasury debt  securities of $1,113,195
with various maturity dates ranging from 2000 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, 1999,  Registrant  received  cash from  interest
revenue,  redemption  of bonds and  distributions  and other  income  from Local
Partnerships and utilized cash for operating expenses and a capital contribution
to a Local  Partnership.  Cash and cash  equivalents  and  investments  in bonds
available-for-sale  decreased, in the aggregate, by approximately $27,000 during
the  year  ended  March  30,  1999  (which  includes  a net  unrealized  gain on
investments in bonds of approximately  $12,000,  the amortization of net premium
on  investments  in bonds of  approximately  $13,000 and the  accretion  of zero
coupon  bonds  of  approximately  $86,000)  and  restricted  cash  decreased  by
approximately  $84,000  as a result  of a capital  contribution  paid to a Local
Partnership. 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,  1999,  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,  1998 of  $2,453,590  and cash  distributions
received from


<PAGE>


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

Local   Partnerships  of  $29,132   (exclusive  of   distributions   from  Local
Partnerships of $7,457  classified as other income).  Payable to general partner
in the  accompanying  balance  sheet as of March  30,  1999  represents  accrued
management fees.

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. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  are not  necessarily  indicative of
adverse  operating  results of a Local  Partnership.  See discussion below under
Local  Partnership  Matters  regarding  certain  Local  Partnerships   currently
operating below economic break even levels.

Registrant's  operations  for the  years  ended  March 30,  1999,  1998 and 1997
resulted in net losses of $2,756,082, $2,649,323, and $2,718,536,  respectively.
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. The decrease in net loss from 1997 to 1998 is primarily attributable to
a  decrease  in  equity  in  loss  of  investment  in  Local   Partnerships   of
approximately  $151,000,  partially  offset by a decrease in interest revenue of
approximately  $66,000  and an increase in  professional  fees of  approximately
$21,000.  Equity in loss of investment in Local Partnerships has fluctuated over
the last three years as a result of (i) impairment losses incurred in connection
with Westminster  Apartments  Limited  Partnership  ("Westminster")  in 1999 and
Christian  Street  Commons  Associates  ("Christian  Street")  in 1998  and (ii)
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  $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.  The  Local  Partnerships'  net  loss of
approximately   $3,260,000  for  the  year  ended  December  31,  1996  includes
depreciation and amortization  expense of approximately  $4,218,000 and interest
on non-mandatory debt of approximately  $299,000, and does not include principal
payments  on  permanent  mortgages  of  approximately  $309,000.  The results of
operations of the Local  Partnerships  for the year ended  December 31, 1998 are
not  necessarily  indicative  of the  results  that may be  expected  in  future
periods.

Local Partnership Matters

The Properties are principally  comprised of subsidized and leveraged low-income
multifamily  residential  complexes  located  throughout  the United  States and
Puerto Rico. The rents of the  Properties,  many of which receive rental subsidy
payments  pursuant  to  subsidy  agreements  ("HAP  Contracts")  are  subject to
specific laws,  regulations and agreements with federal and state agencies.  One
Local  Partnership's HAP Contracts are scheduled to expire in 1999. In addition,
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, 1998, revenue from operations
of the Local Partnerships have generally been sufficient to



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

cover operating  expenses and Mandatory Debt Service.  Substantially  all of the
Local  Partnerships  are  effectively  operating  at or near break even  levels,
although certain Local Partnerships'  operating  information  reflects operating
deficits that do not represent cash deficits due to their mortgage and financing
structure and the required  deferral of property  management fees.  However,  as
discussed below, certain Local Partnerships'  operating information indicates 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 Christian  Street  require the Local
General  Partners to advance  funds to cover  operating  deficits up to $150,000
through 2008 and to cause the management agent to defer property management fees
in order to avoid a default under the  mortgage.  Christian  Street  incurred an
operating deficit of approximately $11,000 for the year ended December 31, 1998,
which includes property management fees of approximately  $5,000. As of December
31, 1998 the Local General  Partners have advanced  approximately  $85,000 under
their Deficit Guarantee  obligation and payments on the mortgage and real estate
taxes are current.  Registrant's  investment balance in Christian Street,  after
the cumulative equity losses,  became zero during the year ended March 30, 1998.
Of  Registrant's  total  annual  Low-income  Tax  Credits,  approximately  2% is
allocated from Christian Street.

The terms of the partnership  agreement of Westminster require the Local General
Partner to advance funds to cover operating  deficits  through 2009 and to cause
the  management  agent to  defer  property  management  fees in order to avoid a
default  under the  mortgage.  Westminster  incurred  an  operating  deficit  of
approximately  $27,000 for the year ended  December  31,  1998,  which  includes
property management fees of approximately  $16,000. In addition,  as of December
31, 1998, Westminster is one month in arrears on its mortgage, and five to seven
months in arrears on its replacement reserve and escrow requirements.  The Local
General  Partner  reports that  Westminster  has not made its required  mortgage
payments in 1999 and that no default has been declared by the lender. Therefore,
due to  ongoing  operating  deficits  and the  uncertainty  of future  operating
income,  it has been  determined  that the underlying  rental  property has been
permanently  impaired  in  accordance  with  applicable   accounting  practices.
Accordingly,  the combined statement of operations of the Local Partnerships for
the  year  ended  December  31,  1998 as  reflected  in Note 5 to the  financial
statements,  includes an impairment loss of $1,802,881.  As a result, Registrant
recognized  additional  equity  in  loss of its  investment  in  Westminster  of
approximately  $700,000 in connection  with the  aforementioned  impairment  and
Registrant's  investment  balance in  Westminster,  after the cumulative  equity
losses,  became zero during the year ended March 30, 1999.  Notwithstanding  the
accounting  treatment  concerning  the  impairment  loss,   Registrant  has  not
experienced  an  interruption  in the  allocation of Low-income Tax Credits from
Westminster. Of Registrant's total annual Low-income Tax Credits,  approximately
4% is allocated from Westminster.

The terms of the partnership agreement of Batesville Family, L.P. ("Batesville")
require the management agent to defer property management fees in order to avoid
a default  under the  mortgage.  Batesville  incurred  an  operating  deficit of
approximately  $26,000 for the year ended  December  31,  1998,  which  includes
property management fees of approximately  $3,000.  Payments on the mortgage and
real estate taxes are current.  Registrant's  investment  balance in Batesville,
after  cumulative  equity  losses,  became  zero during the year ended March 30,
1997. Of Registrant's  total annual Low-income Tax Credits,  approximately 1% is
allocated from Batesville.

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  $218,000
for the year ended December 31, 1998, which includes property management fees of
approximately  $99,000.  Payments  on the  mortgage  and real  estate  taxes are
current.  During  1998,  Sydney  Engel  utilized  approximately  $52,000  of  an
operating deficit reserve,  which has a balance of approximately  $375,000 as of
December  31,  1998.  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  $290,000 as of December 31, 1998 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  $53,000 for the year ended  December  31, 1998.  Of  Registrant's
total annual  Low-income Tax Credits,  approximately 8% is allocated from Fulton
Street

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.




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

Adoption of Accounting Standard

Registrant has adopted Statement of Financial  Accounting  Standard ("SFAS") No.
130, "Reporting  Comprehensive  Income." SFAS No. 130 establishes  standards for
reporting  and display of  comprehensive  income and its  components  (revenues,
expenses,  gains  and  losses)  in  a  full  set  of  general-purpose  financial
statements.  Other comprehensive income (loss) in the accompanying statements of
operations  resulted from net unrealized  gains (losses) on investments in bonds
available-for-sale.  Accumulated other comprehensive  income in the accompanying
balance  sheets  reflects  the net  unrealized  gain  on  investments  in  bonds
available-for-sale.  The  statements of operations for the years ended March 30,
1998 and 1997 include certain  reclassifications to reflect the adoption of SFAS
No. 130.

Registrant  has  adopted  SFAS  No.  131,  "Disclosures  about  Segments  of  an
Enterprise and Related  Information," which establishes  standards for reporting
information about operating segments and related  disclosures about products and
services,  geographic areas and major  customers.  Registrant is in one business
segment and follows the requirements of SFAS No. 131.

Year 2000 Compliance

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

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

The market value of Registrant's  investments in bonds 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.  Because  Registrant
presently  intends  to hold such  investments  to their  respective  maturities,
Registrant  does not anticipate any material  adverse impact in connection  with
such investments.

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



<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.



<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, 1999 and 1998, 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, 1999.  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,  1999 and  1998,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
March 30, 1999, in conformity with generally accepted accounting principles.


/s/ Reznick Fedder & Silverman

Bethesda, Maryland
May 13, 1999



<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                             MARCH 30, 1999 AND 1998


<TABLE>
<CAPTION>
<S>                                                                       <C>            <C>                     <C>



                                                                          Notes             1999               1998
                                                                          -----         ----------         ----------
ASSETS

Cash and cash equivalents                                                  3,9       $     567,613      $     419,372
Restricted cash                                                           3,5,9                                84,433
Investments in bonds available-for-sale                                    4,9           2,890,010          3,065,441
Investment in local partnerships                                           5,8           6,032,392          8,515,114
Interest receivable                                                         9               21,531             21,909
                                                                                        ----------         ----------
                                                                                        $9,511,546      $  12,106,269
                                                                                        ==========         ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                                    8        $   1,105,703      $     997,634
   Payable to general partner                                              6,8           1,061,185            930,614
   Capital contributions payable                                           5,9                                 84,433
   Other                                                                                    11,700             16,450
                                                                                        ----------         ----------
                                                                                         2,178,588          2,029,131
                                                                                        ==========         ==========
Commitments and contingencies                                               8

Partners' equity (deficit)                                                 2,4

   General partner                                                                        (242,419)          (214,858)
   Limited partners (35,883 units of limited partnership interest
     outstanding)                                                                        7,530,193         10,258,714
   Accumulated other comprehensive income, net                                              45,184             33,282
                                                                                        ----------         ----------
                                                                                         7,332,958         10,077,138
                                                                                        ----------         ----------
                                                                                     $   9,511,546      $  12,106,269
                                                                                        ==========         ==========
</TABLE>


                       See Notes to Financial Statements.


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                    YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>



<S>                                                     <C>                <C>               <C>                     <C>
                                                         Notes           1999                 1998                 1997
                                                         -----          ------               ------               ------

REVENUE

Interest                                                            $   244,767       $      250,973     $       317,065
Other income from local partnerships                                      7,457                6,672
                                                                      ----------           ----------         -----------
TOTAL REVENUE                                                           252,224              257,645             317,065
                                                                      ==========           ==========         ===========

EXPENSES

Administration fees                                        8            230,571              230,571             230,571
Management fees                                           6,8           230,571              230,571             230,571
Professional fees                                                        67,327               67,118              45,849
Printing, postage and other                                              26,247               20,277              18,804
                                                                      ----------           ----------          ----------
TOTAL EXPENSES                                                          554,716              548,537             525,795
                                                                      ----------           ----------          ----------
Loss from operations                                                   (302,492)            (290,892)           (208,730)

Equity in loss of investment in local partnerships         5         (2,453,590)          (2,358,431)         (2,509,806)
                                                                      ----------           ----------          ----------
NET LOSS                                                             (2,756,082)          (2,649,323)         (2,718,536)

Other comprehensive income (loss)                          4             11,902              215,397             (87,008)
                                                                      ----------           ----------          ----------
COMPREHENSIVE LOSS                                                $  (2,744,180)      $   (2,433,926)     $   (2,805,544)
                                                                      ==========           ==========          ==========
NET LOSS ATTRIBUTABLE TO                                   2

   General partner                                                     $(27,561)      $      (26,493)     $      (27,185)
   Limited partners                                                  (2,728,521)          (2,622,830)         (2,691,351)
                                                                      ----------           ----------          ----------
                                                                  $  (2,756,082)      $   (2,649,323)     $   (2,718,536)
                                                                      ==========           ==========          ==========
NET LOSS per unit of limited partnership
   interest (35,883 units of limited partnership
   interest)                                                      $      (76.04)     $       (73.09)     $       (75.00)

                                                                      ==========           ==========          ==========
</TABLE>


                       See Notes to Financial Statements.


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
               STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                    YEARS ENDED MARCH 30, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
<S>                                                      <C>              <C>                  <C>                  <C>




                                                                                      Accumulated Other
                                                       General         Limited          Comprehensive
                                                       Partner         Partners       Income (Loss), Net       Total
                                                    ------------     -----------      ------------------    -----------
Partners' equity (deficit), March 30, 1996            $ (161,180)    $15,572,895         $    (95,107)      $15,316,608

Net loss                                                 (27,185)     (2,691,351)                            (2,718,536)

Other comprehensive loss, net                                                                 (87,008)          (87,008)
                                                      ----------     -----------         ------------       -----------


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
                                                      ===========    ===========         ============       ===========

</TABLE>



                       See Notes to Financial Statements.


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S>                                                                       <C>                <C>             <C>
                                                                             1999                1998           1997
                                                                          ----------         ----------      ----------

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                                         $  172,539         $  183,964       $  248,496
Cash used for local partnerships for deferred expenses                        (4,750)            (4,750)          (4,750)
Cash paid for
     administration fees                                                    (100,000)          (100,000)        (100,000)
     management fees                                                        (100,000)          (100,000)        (100,000)
     professional fees                                                       (84,827)           (55,618)         (40,999)
     printing, postage and other expenses                                    (31,250)           (26,828)          (9,989)
                                                                          ----------         ----------       ----------
Net cash used in operating activities                                       (148,288)          (103,232)          (7,242)
                                                                          ----------         ----------       ----------

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions and other income from local partnerships                   36,589             38,191           33,605
Maturity/redemption of bonds                                                 259,940             75,000          200,000
Transfer from (to) restricted cash                                            84,433          1,224,775         (206,881)
Investment in local partnerships                                             (84,433)        (1,224,775)
                                                                          ----------         ----------       ----------

Net cash provided by investing activities                                    296,529            113,191           26,724
                                                                          ----------         ----------       ----------
Net increase in cash and cash equivalents                                    148,241              9,959           19,482

Cash and cash equivalents at beginning of year                               419,372            409,413          389,931
                                                                          ----------         ----------       ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $  567,613         $  419,372       $  409,413
                                                                          ==========         ==========       ==========


SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain (loss) on investments in bonds available-for-sale, net    $   11,902         $  215,397       $  (87,008)
                                                                          ==========         ==========       ==========
Increase in capital contributions payable                                                                     $  206,881
                                                                                                              ==========

</TABLE>
See reconciliation of net loss to net cash used in operating  activities on page
20.

                       See Notes to Financial Statements.


<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S>                                                                            <C>                  <C>               <C>


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

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES

Net loss                                                                     $  (2,756,082)      $ (2,649,323)      $ (2,718,536)

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

     Equity in loss of investment in local partnerships                          2,453,590          2,358,431          2,509,806
     Distributions from local partnerships classified as other income               (7,457)            (6,672)
     Loss on redemption of bonds                                                       677
     Amortization of net premium on investments in bonds                            13,206             14,907             16,852
     Accretion of zero coupon bonds                                                (86,490)           (85,180)           (88,256)
     Decrease in interest receivable                                                   378              3,264              2,835
     Increase in payable to general partner                                        130,571            130,571            130,571
     Increase in accounts payable and accrued expenses                             108,069            135,520            144,236
     Decrease in other liabilities                                                  (4,750)            (4,750)            (4,750)
                                                                             -------------       ------------       ------------


NET CASH USED IN OPERATING ACTIVITIES                                        $    (148,288)      $   (103,232)      $     (7,242)
                                                                             =============       ============       ============

</TABLE>


                       See Notes to Financial Statements.


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                          MARCH 30, 1999, 1998 AND 1997


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.
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.

Adoption of Accounting Standard

The Partnership has adopted Statement of Financial  Accounting Standard ("SFAS")
No. 130, "Reporting  Comprehensive  Income." SFAS No. 130 establishes  standards
for reporting and display of comprehensive income and its components  (revenues,
expenses,  gains  and  losses)  in  a  full  set  of  general-purpose  financial
statements.  Other comprehensive income (loss) in the accompanying statements of
operations  resulted from net unrealized  gains (losses) on investments in bonds
available-for-sale.  Accumulated other comprehensive  income in the accompanying
balance  sheets  reflects  the net  unrealized  gain  on  investments  in  bonds
available-for-sale.  The  statements of operations for the years ended March 30,
1998 and 1997 include certain  reclassifications to reflect the adoption of SFAS
No. 130.

The  Partnership  has adopted SFAS No. 131,  "Disclosures  about  Segments of an
Enterprise and Related  Information," which establishes  standards for reporting
information about operating segments and related  disclosures about products and
services,  geographic  areas  and major  customers.  The  Partnership  is in one
business segment and follows the requirements of SFAS No. 131.


<PAGE>


                     MERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997



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


Cash and Cash Equivalents

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

Restricted Cash

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

Investments in Bonds Available-For-Sale

Investments in bonds classified as available-for-sale 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  classified  as
available-for-sale  would be based on  various  factors,  including  significant
movements  in  interest  rates  and  liquidity   needs.   Investments  in  bonds
available-for-sale  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  available-for-sale 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  available-for-sale  are included in,
or offset  against,  interest  revenue on the basis of the adjusted cost of each
specific investment redeemed or sold.

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 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.


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.


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997



3. Cash and Cash Equivalents

As of March 30, 1999, the Partnership has cash and cash  equivalents of $567,613
which are deposited in  interest-bearing  accounts with an institution  which is
not insured by the Federal Deposit Insurance Corporation.


4. Investments in Bonds Available-For-Sale

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 available-for-sale
are reflected in the accompanying balance sheets at estimated fair value.

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

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

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>
As of March  30,  1998,  certain  information  concerning  investments  in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
               <S>                           <C>               <C>              <C>                  <C>
                                                              Gross            Gross           Estimated
                                           Amortized        unrealized       unrealized          fair
Description and maturity                     cost             gains            losses            value
------------------------                 ------------      -----------      ------------      -----------

Corporate debt securities
After one year through five years        $    680,637      $    13,309      $       (74)      $   693,872
After five years through ten years            367,021            7,481           (2,467)          372,035
After ten years                               842,237           16,400           (7,550)          851,087
                                         ------------      -----------      ------------      -----------
                                            1,889,895           37,190          (10,091)        1,916,994
                                         ------------      -----------      ------------      -----------
U.S. Treasury debt securities
After five years through ten years            537,345            5,202           (1,275)          541,272
After ten years                               479,189            5,608               --           484,797
                                         ------------      -----------      ------------      -----------


                                            1,016,534           10,810           (1,275)        1,026,069
                                         ------------      -----------      ------------      -----------
U.S. government and agency securities
After ten years                               125,730               --           (3,352)          122,378
                                         ------------      -----------      ------------      -----------


                                         $  3,032,159      $    48,000      $   (14,718)     $  3,065,441
                                         ============      ===========      ===========      ============
</TABLE>


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES  TO FINANCIAL  STATEMENTS - (Continued) MARCH 30, 1999,
                          1998 AND 1997


5.     Investment in Local Partnerships

As of March 30, 1999, 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;
       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;
       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.



<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


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:

<TABLE>
  <CAPTION>
                    <S>                                          <C>                      <C>
                                                                     The
                                                                 Partnership           ATCP II
                                                                 -----------           -------
                 Batesville Family, L.P.                            61.75%              37.25%

                 Bruce Housing Associates, L.P.                     61.75               37.25

                 Carrington Limited Dividend Housing
                   Association Limited Partnership                  65.95               33.05

                 Ivy Family, L.P.                                   61.75               37.25

                 Lawrence Road Properties, Ltd.                     61.75               37.25

                 Mirador del Toa Limited Partnership                59.06               39.94

                 Purvis Heights Properties, L.P.                    61.75               37.25

                 Queen Lane Investors                               48.50               50.50

</TABLE>

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 has
committed  to make  capital  contribution  payments in the  aggregate  amount of
$29,264,476, all of which has been paid as of March 30, 1999. As of December 31,
1998, the Local  Partnerships  have outstanding  mortgage loans payable totaling
approximately  $86,359,000 and accrued  interest  payable on such loans totaling
approximately  $2,420,000,  which are  secured by security  interests  and liens
common to mortgage  loans on the Local  Partnerships'  real  property  and other
assets.

Equity  in  loss  of  investment  in  Local   Partnerships  is  limited  to  the
Partnership's  investment balance in each Local Partnership;  any such excess is
applied to other partners'  capital in any such Local  Partnership (see Note 1).
The  amount  of such  excess  losses  applied  to other  partners'  capital  was
$2,502,485,  $1,665,224 and $534,104 for the years ended December 31, 1998, 1997
and 1996, respectively, as reflected in the combined statements of operations of
the Local Partnerships reflected herein Note 5.

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 $1,032,655 in connection with Christian  Street,
respectively.

The combined  balance sheets of the Local  Partnerships  as of December 31, 1998
and 1997 and the combined statements of operations of the Local Partnerships for
the years ended  December 31, 1998,  1997 and 1996 are reflected on pages 26 and
27, respectively.



<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997



5.     Investment in Local Partnerships (continued)

The combined  balance sheets of the Local  Partnerships  as of December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
                 <S>                                                              <C>                     <C>

                                                                             1998                 1997
                                                                         ------------         ------------
ASSETS

Cash and cash equivalents                                                $  1,396,493         $    863,259
Rents receivable                                                              429,688              456,077
Capital contributions receivable                                               84,433               84,433
Escrow deposits and reserves                                                4,657,419            4,403,622
Land                                                                        3,910,215            3,910,215
Buildings and improvements (net of accumulated depreciation of
  $31,057,575 and $27,045,787)                                             82,003,262           87,586,072
Intangible assets (net of accumulated amortization of
  $618,890 and $584,504)                                                      716,724              762,749
Other                                                                         804,785            1,401,766
                                                                         ------------         ------------
                                                                         $ 94,003,019         $ 99,468,193
                                                                         ============         ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                                  $   619,342          $    442,564
  Due to related parties                                                   5,154,179             5,247,688
  Mortgage loans                                                          86,358,980            86,919,773
  Notes payable                                                               26,990                62,111
  Accrued interest                                                         2,420,323             2,109,721
  Other                                                                      613,520               580,863
                                                                         -----------          ------------
                                                                          95,193,334            95,362,720
                                                                         -----------          ------------
Partners' equity (deficit)
  American Tax Credit Properties III L.P.
    Capital contributions, net of distributions (includes
      receivable of $84,433)                                              29,004,177            29,048,449
    Cumulative loss                                                      (22,976,466)          (20,522,876)
                                                                         -----------          ------------
                                                                           6,027,711             8,525,573
                                                                         -----------          ------------
General partners and other limited partners, including ATCP II
  Capital contributions, net of distributions                               (177,871)             (123,346)
  Cumulative loss                                                         (7,040,155)           (4,296,754)
                                                                         -----------          ------------
                                                                          (7,218,026)           (4,420,100)
                                                                         -----------          ------------
                                                                          (1,190,315)            4,105,473
                                                                         -----------          ------------
                                                                         $94,003,019          $ 99,468,193
                                                                         ===========          ============

</TABLE>

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
           NOTES TO FINANCIAL STATEMENTS - (Continued) MARCH 30, 1999,
                                  1998 AND 1997



5. Investment in Local Partnerships (continued)

The combined  statements of operations of the Local  Partnerships  for the years
ended December 31, 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
                     <S>                                          <C>                        <C>                      <C>


                                                                 1998                     1997                     1996
                                                             --------------         --------------              -------------

        REVENUE

        Rental                                              $   10,620,935           $   10,466,426           $   10,325,782

        Interest and other                                         398,028                  365,948                  437,813
                                                              -------------          --------------             -------------
        TOTAL REVENUE                                           11,018,963               10,832,374               10,763,595
                                                              =============          ==============             =============
        EXPENSES

        Administrative                                           2,173,131                2,049,122                2,121,842

        Utilities                                                  988,768                1,013,167                1,018,174

        Operating, maintenance and other                         2,630,453                2,253,753                1,987,209

        Taxes and insurance                                      1,235,007                1,270,567                1,249,956

        Financial (including amortization of
          $46,025, $48,430 and $105,969)                         3,373,926                3,464,203                3,534,807

        Depreciation                                             4,011,788                4,017,625                4,111,594

        Loss from impairment of long-lived assets                1,802,881                1,032,653
                                                               -----------             ------------              -----------
        TOTAL EXPENSES                                          16,215,954               15,101,090               14,023,582
                                                               -----------             ------------              -----------

        NET LOSS                                            $  (5,196,991)           $   (4,268,716)          $   (3,259,987)
                                                               ===========             ============              ===========
        NET LOSS ATTRIBUTABLE TO

           American Tax Credit Properties III L.P.          $  (2,453,590)           $   (2,358,431)          $   (2,509,806)

           General partners and other limited partners,
           including ATCP II, which includes specially
           allocated items of revenue (expense) to certain
           general  partners  of  $1,697,   $0,  and
          ($828),  and  $2,502,485 $1,665,224, and
           $534,104 of Partnership loss in excess of
           investment                                          (2,743,401)              (1,910,285)                (750,181)
                                                               -----------              -----------             ------------

                                                              $(5,196,991)             $(4,268,716)             $(3,259,987)
                                                               ===========              ===========             ============

</TABLE>


<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


5.Investment in Local Partnerships (continued)

Investment  activity with respect to each Local  Partnership  for the year ended
March 30, 1999 is as follows:
<TABLE>
<CAPTION>
<S>                                                 <C>              <C>             <C>            <C>             <C>
                                                                                     Cash
                                                  Investment    Partnership's    distributions      Cash         Investment
                                                   in Local       equity in        received     distributions     in Local
                                                 Partnership    income (loss)     during the    classified as    Partnership
                                                  balance as        for the       year ended    other income    balance as of
                                                      of          year ended      March 30,      during the       March 30,
Name of Local Partnership                         March 30,      December 31,        1999        year ended         1999
                                                     1998            1998                         March 30,
                                                                                                    1999
------------------------------------------------ ------------- ----------------- ------------- ---------------- --------------

April Gardens Apartments II Limited Partnership $     --      $        -- (2)     $    (960)      $      960    $          --

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 Partnership     --                   -- (2)        (1,320)           1,320               --

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

Howard L. Miller Sallisaw Apartments II, L.P.     30,407          (13,571)               --               --           16,836
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 Partnership         172,088         (54,713)               --               --          117,375
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 Partnership         170,249         (34,449)               --               --          135,800
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 Partnership        668,381        (35,640)            (5,000)              --          627,741
Sydney Engel Associates L.P.                      --                   -- (2)            --               --               --

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

Waynesboro Apartments Limited Partnership         55,015         (42,568)                --               --           12,447
West Calhoun City, L.P.                           105,383        (16,282)                --               --           89,101
Westminster Apartments Limited Partnership        771,049       (771,049)(1)             --               --               --
                                                  ----------  -----------         ----------     -----------     ------------
                                                 $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.
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997

5.Investment in Local Partnerships (continued)

Investment  and  capital  contribution  activity  with  respect to each Local
Partnership  for the year ended  March 30, 1998 is as follows:

<TABLE>
<CAPTION>
<S>                                             <C>           <C>                  <C>         <C>           <C>              <C>


                                                                              Cash
                                           Investment                     distributions      Cash         Investment
                                            in Local     Partnership's      received     distributions     in Local       Capital
                                          Partnership      equity in       during the    classified as    Partnership   contribution
                                           balance as     loss for the     year ended    other income    balance as of   payable as
                                               of          year ended      March 30,      during the       March 30,    of March 30,
Name of Local Partnership                  March 30,      December 31,        1998        year ended         1998           1998
                                              1997            1997                         March 30,
                                                                                             1998
                                          ------------    ------------    -------------   -------------   -------------  -----------
April Gardens Apartments II Limited
  Partnership                             $               $         --    $       (960)  $        960      $        --  $    --
Ashland Park Apartments, L.P.                  56,021          (51,802)             --             --            4,219       --
Auburn Family, L.P.                            50,541          (10,791)             --             --           39,750       --
Batesville Family, L.P.                        --                   -- (2)          --             --               --       --
Bay Springs Elderly, L.P.                      93,455          (20,374)             --             --           73,081       --
Brisas del Mar Apartments Limited              --                   -- (2)      (1,320)         1,320               --       --
  Partnership
Bruce Housing Associates, L.P.                 46,518          (16,029)             --             --           30,489       --
Carrington Limited Dividend Housing
  Association Limited Partnership           1,126,050         (115,198)             --             --        1,010,852       --
Chestnut Park Associates, L.P.              1,346,249         (487,017)             --             --          859,232       --
Chowan Senior Manor Associates Limited
  Partnership                                  62,319          (54,389)             --             --            7,930       --
Christian Street Commons Associates           400,233         (400,233)(1)          --             --               --       --
Country View Apartments                       185,611          (28,719)           (750)            --          156,142       --
Desarrollos de Belen Limited Partnership      160,973          (58,452)             --             --          102,521       --
Desarrollos de Emaus Limited Partnership      242,640          (78,082)             --             --          164,558       --
Ellinwood Heights Apartments, L.P.             40,017          (25,785)             --             --           14,232       --
Fulton Street Houses Limited Partnership      850,560         (280,887)             --             --          569,673       --
Hayes Run Limited Partnership                  --                   -- (2)          --             --               --       --
Howard L. Miller Sallisaw Apartments           36,263           (5,856)             --             --           30,407       --
  II, L.P.
Hurlock Meadow Limited Partnership              8,747           (7,247)(1)      (1,500)            --               --      84,433
Ivy Family, L.P.                               34,473          (17,102)             --             --           17,371       --
Justin Associates                           1,131,016         (130,723)             --             --        1,000,293       --
LaBelle Commons, Ltd.                         104,805          (27,055)         (2,500)            --           75,250       --
Lawrence Road Properties, Ltd.                  3,327           (3,327)(1)          --             --               --       --
Loma Del Norte Limited Partnership            149,057          (26,623)         (2,000)            --          120,434       --
Long Reach Associates Limited                 220,147          (48,059)             --             --          172,088       --
  Partnership
Mirador del Toa Limited Partnership            --                  --  (2)        (572)           572               --       --
Moore Haven Commons, Ltd.                      --                  --  (2)          --             --               --       --
NP-89 Limited Dividend Housing
  Association Limited Partnership           1,644,687         (136,116)        (10,000)            --        1,498,571       --
Nash Hill Associates, Limited                 192,666          (18,780)         (3,637)            --          170,249       --
  Partnership
North Calhoun City, L.P.                       82,162           (6,224)             --             --           75,938       --
Orange City Plaza, Limited Partnership        391,105          (15,551)             --             --          375,554       --
Puerta del Mar Limited Partnership             --                   -- (2)      (1,320)         1,320               --       --
Purvis Heights Properties, L.P.                71,362          (22,933)             --             --           48,429       --
Queen Lane Investors                          268,117          (58,615)         (3,632)            --          205,870       --
Somerset Manor, Ltd.                           --                   -- (2)          --             --               --       --
Sugar Cane Villas, Ltd.                        --                   -- (2)          --             --               --       --
Summerfield Apartments Limited                716,388          (43,007)         (5,000)            --          668,381       --
  Partnership
Sydney Engel Associates L.P.                   --                   -- (2)      (2,500)         2,500               --       --
Union Valley Associates Limited               118,570          (40,993)         (1,250)            --           76,327       --
  Partnership
Walnut Grove Family, L.P.                      39,568          (23,742)             --             --           15,826       --
Waynesboro Apartments Limited                  96,977          (40,712)         (1,250)            --           55,015       --
  Partnership
West Calhoun City, L.P.                       119,943          (14,560)             --             --          105,383       --
Westminster Apartments Limited                814,497          (43,448)             --             --          771,049       --
                                          ------------    -------------      -----------    -----------    -----------  ------------
  Partnership
                                          $ 10,905,064    $ (2,358,431)     $  (38,191)    $   6,672       $ 8,515,114    $   84,433
                                          ============     ============      ==========     ===========     ==========  ============
</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.





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


5.     Investment in Local Partnerships (continued)

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

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

        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 Partnership      2,658,737         100,280       3,227,091       (1,080,780)
        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 Partnership           1,887,073          96,190       2,493,144         (514,569)
        Desarrollos de Emaus Limited Partnership           3,205,734         214,000       4,034,206         (771,217)
        Ellinwood Heights Apartments, L.P.                   689,658          10,000         864,434         (214,607)
        Fulton Street Houses Limited Partnership           3,869,930               2       5,987,214       (1,480,023)
        Hayes Run Limited Partnership                      1,428,831          85,060       1,488,176         (311,322)
        Howard L. Miller Sallisaw Apartments II, L.P.        616,935          39,000         726,868         (188,000)
        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 Partnership          1,482,023         118,446       1,877,387         (412,940)
        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 Partnership          1,472,616         123,876       1,676,137         (356,912)
        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 Partnership         1,784,586         195,411       2,684,961         (488,319)
        Sydney Engel Associates L.P.                      17,635,198         284,305      19,443,724       (5,701,503)
        Union Valley Associates Limited Partnership        1,450,664          97,800       1,757,216         (364,895)
        Walnut Grove Family, L.P.                            848,821          30,000       1,017,192         (283,400)
        Waynesboro Apartments Limited Partnership          1,486,904          76,000       1,790,366         (400,847)
        West Calhoun City, L.P.                              776,927          18,000       1,024,405         (277,570)
        Westminster Apartments Limited Partnership         1,609,558          51,651       1,025,737         (408,129)
                                                        -------------    -----------    ------------    -------------
                                                        $  86,358,980   $  3,910,215   $ 113,060,837   $  (31,057,575)
                                                        =============    ===========    ============    =============
 </TABLE>




<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


5.     Investment in Local Partnerships (continued)

       Property  information for each Local  Partnership as of December 31, 1997
is as follows:
<TABLE>
<CAPTION>
                <S>                                             <C>            <C>           <C>             <C>

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

        April Gardens Apartments II Limited             $  2,004,455    $    39,984     $  2,469,537     $   (706,940)
          Partnership
        Ashland Park Apartments, L.P.                      1,042,772          50,160       1,247,739         (321,176)
        Auburn Family, L.P.                                  472,356          20,000         557,595         (135,833)
        Batesville Family, L.P.                            1,443,783          52,000       1,806,202         (474,324)
        Bay Springs Elderly, L.P.                            678,794          38,000         841,698         (200,630)
        Brisas del Mar Apartments Limited Partnership      2,664,848         100,280       3,227,091         (946,001)
        Bruce Housing Associates, L.P.                     1,112,700          16,000       1,418,598         (408,466)
        Carrington Limited Dividend Housing
          Association Limited Partnership                  3,464,852         200,000       6,364,620       (1,803,962)
        Chestnut Park Associates, L.P.                     5,239,113         781,700       8,654,778       (2,121,750)
        Chowan Senior Manor Associates Limited             1,267,699          86,101       1,495,884         (374,073)
          Partnership
        Christian Street Commons Associates                  627,335              --              --               --
        Country View Apartments                              941,880          35,698       1,213,947         (182,517)
        Desarrollos de Belen Limited Partnership           1,889,550          96,190       2,490,637         (430,785)
        Desarrollos de Emaus Limited Partnership           3,211,920         214,000       4,031,061         (634,977)
        Ellinwood Heights Apartments, L.P.                   691,142          10,000         864,075         (199,073)
        Fulton Street Houses Limited Partnership           3,869,930               2       5,959,123       (1,258,635)
        Hayes Run Limited Partnership                      1,431,884          85,060       1,481,235         (273,151)
        Howard L. Miller Sallisaw Apartments II, L.P.        618,138          39,000         725,785         (175,072)
        Hurlock Meadow Limited Partnership                 1,276,908          49,525       1,559,298         (381,270)
        Ivy Family, L.P.                                     801,919          11,000       1,035,459         (304,284)
        Justin Associates                                  2,483,842          27,472       4,344,154         (943,253)
        LaBelle Commons, Ltd.                              1,018,217          98,947       1,184,937         (243,375)
        Lawrence Road Properties, Ltd.                       762,171          50,000         928,273         (238,923)
        Loma Del Norte Limited Partnership                 1,443,839          84,874       1,769,702         (310,772)
        Long Reach Associates Limited Partnership          1,485,035         118,446       1,868,040         (360,604)
        Mirador del Toa Limited Partnership                1,891,902         105,000       2,327,341         (682,219)
        Moore Haven Commons, Ltd.                            932,340          73,645       1,197,000         (327,540)
        NP-89 Limited Dividend Housing Association
          Limited Partnership                              4,306,098         150,000       7,333,401       (1,728,582)
        Nash Hill Associates, Limited Partnership          1,475,786         123,876       1,676,137         (310,390)
        North Calhoun City, L.P.                             495,462          12,000         631,120         (152,679)
        Orange City Plaza, Limited Partnership               529,837          53,904       1,041,636         (205,726)
        Puerta del Mar Limited Partnership                 2,537,277         115,000       3,046,045         (905,213)
        Purvis Heights Properties, L.P.                    1,153,999          47,000       1,443,465         (367,819)
        Queen Lane Investors                               1,580,073          60,301       2,735,277         (670,274)
        Somerset Manor, Ltd.                                 901,698          53,383       1,097,281         (284,763)
        Sugar Cane Villas, Ltd.                            3,322,803          58,500       4,059,461       (1,080,291)
        Summerfield Apartments Limited Partnership         1,806,784         195,411       2,683,173         (416,913)
        Sydney Engel Associates L.P.                      17,831,381         284,305      19,436,525       (4,991,233)
        Union Valley Associates Limited Partnership        1,453,673          97,800       1,745,528         (319,584)
        Walnut Grove Family, L.P.                            850,407          30,000       1,011,054         (243,598)
        Waynesboro Apartments Limited Partnership          1,490,153          76,000       1,786,404         (353,765)
        West Calhoun City, L.P.                              783,367          18,000       1,012,925         (237,939)
        Westminster Apartments Limited Partnership         1,631,651          51,651       2,828,618         (337,413)
                                                       ------------       ----------    ------------   --------------
                                                      $  86,919,773     $  3,910,215  $  114,631,859  $   (27,045,787)
                                                       ============       ==========    ============   ==============
 </TABLE>




<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


5.    Investment in Local Partnerships (continued)

     The summary of property activity during the year ended December 31, 1998 is
     as follows:
<TABLE>
<CAPTION>
                 <S>                                 <C>                         <C>                   <C>

                                                                              Net change
                                                  Balance as of            during the year           Balance as of
                                                December 31, 1997               ended              December 31, 1998
                                                                          December 31, 1998

                                                -----------------         -----------------        -----------------
        Land                                    $      3,910,215          $             --         $      3,910,215

        Buildings and improvements                   114,631,859               (1,571,022)              113,060,837
                                                ----------------           ---------------         -----------------

                                                     118,542,074               (1,571,022)              116,971,052

        Accumulated depreciation                     (27,045,787)              (4,011,788)              (31,057,575)
                                                 ---------------           --------------           ----------------
                                                $     91,496,287          $    (5,582,810)         $     85,913,477
                                                 ===============           ==============           ================

</TABLE>

6.   Transactions with General Partner and Affiliates

     For the years ended March 30, 1999,  1998 and 1997,  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>
                      <S>                               <C>                          <C>                        <C>
                                                           1999                     1998                      1997
                                                    Paid       Incurred       Paid       Incurred       Paid        Incurred
                                                    ------    -----------   ---------    ----------   ---------  ------------
         Management fees (see Note 8)            $  100,000   $  230,571   $  100,000   $  230,571   $  100,000   $   230,571

</TABLE>


     For  the  years  ended  December  31,  1998,   1997  and  1996,  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:
<TABLE>
<CAPTION>
                       <S>                                 <C>                           <C>                  <C>

                                                               1998                      1997                   1996

                                                      Paid       Incurred       Paid        Incurred          Paid       Incurred
                                                    ---------    ----------  ----------    -----------      ---------  ------------


         Property management fees               $   109,732    $  130,570     $112,083      $127,518       $   3,599    $  35,785



         Insurance and other services                23,117        34,455       22,079        22,079          35,943       34,316




</TABLE>



<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


7.   Taxable Loss

     A reconciliation of the financial statement net loss of the Partnership for
     the years  ended March 30,  1999,  1998 and 1997 to the tax return net loss
     for the years ended December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
                  <S>                                               <C>                   <C>                   <C>

                                                                     1999                  1998                  1997
        Financial  statement  net loss for the years ended          -----------         -----------            ----------
           March 30, 1999, 1998 and 1997                         $  (2,756,082)        $ (2,649,323)          $(2,718,536)



        Add (less) net transactions occurring between

           January 1, 1996 and March 30, 1996                               --               --                   (49,819)

           January 1, 1997 and March 30, 1997                               --              (58,090)               58,090

           January 1, 1998 and March 30, 1998                          (76,012)              76,012                 --

           January 1, 1999 and March 30, 1999                           90,310                --                    --


                                                                    ------------          ------------           ------------
        Adjusted financial statement net loss for the years
           ended December 31, 1998, 1997 and 1996                   (2,741,784)           (2,631,401)           (2,710,265)



        Adjustment to management fees pursuant to
           Internal Revenue Code Section 267                           130,571               130,571                130,571



        Differences arising from equity in loss of
           investment in Local Partnerships                           (903,119)              (718,329)              (514,969)



        Interest revenue                                               210,630               (208,732)                 --



        Other differences                                              (9,629)                 (5,367)                  (107)


                                                                    ------------            ------------           ------------
        Tax return net loss for the years ended
           December 31, 1998, 1997 and 1996                      $  (3,313,331)           $ (3,433,258)           $(3,094,770)

</TABLE>


       The differences  between the investment in Local Partnerships for tax and
       financial  reporting  purposes  as of  December  31, 1998 and 1997 are as
       follows:
<TABLE>
<CAPTION>
                    <S>                                                    <C>                     <C>

                                                                            1998                       1997
                                                                        -----------                ------------

        Investment in Local Partnerships - financial reporting        $   6,027,711                $  8,525,573

        Investment in Local Partnerships - tax                            4,279,897                   7,473,246


                                                                         ----------                 -----------
                                                                      $   1,747,814                $  1,052,327
                                                                         ==========                 ===========
</TABLE>


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


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


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,  1999.  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, 1999.  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  $1,061,185  and $930,614  are recorded as payable to general  partner in the
accompanying balance sheets as of March 30, 1999 and 1998, respectively.

In addition,  pursuant to the Partnership Agreement, the Partnership is required
to pay ML Fund Administrators Inc., an affiliate of the Selling Agent, an annual
administration   fee   ("Administration   Fee")   and   an   annual   additional
administration  fee  ("Additional  Administration  Fee") for its  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, 1999. 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, 1999.
Such amounts are aggregated and reflected under the caption  administration fees
in  the  accompanying  financial  statements.  Unpaid  Administration  Fees  and
Additional  Administration  Fees in the amount of  $1,061,185  and  $930,614 are
included in accounts payable and accrued  expenses in the  accompanying  balance
sheets as of March 30, 1999 and 1998, respectively.

The rents of the  Properties,  many of which receive  rental  subsidy  payments,
including  payments  under  Section 8 of Title II of the Housing  and  Community
Development Act of 1974 ("Section 8"), are subject to specific laws, regulations
and agreements with federal and state agencies. The subsidy agreements expire at
various times during and after the Compliance Periods of the Local Partnerships.
In October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability  Act,  whereby the United  States  Department of Housing and Urban
Development  ("HUD") was given the  authority  to renew  certain  project  based
Section 8 contracts  expiring during HUD's fiscal year 1998,  where requested by
an owner,  for an  additional  one year term  generally at or below current rent
levels,  subject to certain guidelines.  In October 1998, HUD issued a directive
related to project based Section 8 contracts  expiring  during HUD's fiscal year
1999 which defines  owners'  notification  responsibilities,  advises  owners of
project  based  Section 8 properties  of what their  options are  regarding  the
renewal of contracts,  provides  guidance and  procedures to owners,  management
agents,  contract  administrators and HUD staff on renewing Section 8 contracts,
provides  guidance on setting renewal rents and handling  renewal rent increases
and provides 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 contracts are scheduled to expire in 1999.



<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 1999, 1998 AND 1997


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 and Restricted Cash
     ---------------------------------------------
     The carrying amounts approximate fair value.


     Investments in Bonds Available-For-Sale
     ---------------------------------------
     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.

     Capital Contributions Payable
     -----------------------------

     The carrying  amount  approximates  fair value in accordance with the Local
     Partnerships' partnership agreements.


     The estimated fair value of the Partnership's  financial instruments as
     of March 30, 1999 and 1998 are disclosed elsewhere in the financial
     statements.



<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:
<TABLE>
<CAPTION>
<S>                                          <C>                                    <C>
                                        Served in present
Name                                    capacity since 1                      Position held
----------------------                  -----------------                     ----------------------

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

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

Richard Paul  Richman,  age 51, 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 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.

Eric  P.  Richelson,  age  47,  is a Vice  President  of  Richman  Housing.  Mr.
Richelson,  formerly  President  of Wilder  Richman  Management  Corporation,  a
property management company affiliated with Richman Housing, is a Vice President
of Richman Asset Management,  Inc. ("RAM") an affiliate of Richman Housing.  Mr.
Richelson's  responsibilities  in connection with RAM include advisory  services
provided to a small business investment company.

Neal Ludeke,  age 41, 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 RAM. 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 38, 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 43, 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.


<PAGE>



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,
1999, 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 May 20,  1999,  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.

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, 1998  allocated to the General  Partner were $33,133 and
$56,042,  respectively.  The net tax losses and Low-income Tax Credits generated
by the  General  Partner  during  the year  ended  December  31,  1998 (from the
allocation of Registrant  discussed above) and allocated to Richman Housing were
$26,781 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, 1999.



<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.
<TABLE>
<CAPTION>
        <S>            <C>                                                <C>

            (3)  Exhibits

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
<TABLE>
<CAPTION>
<S>              <C>                                                 <C>
                                                                     Incorporated by
                  Exhibit                                            Reference to
                  -----------------------------------------------    ---------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
<TABLE>
<CAPTION>
<S>               <C>                                                   <C>
                                                                     Incorporated by
                  Exhibit                                            Reference to
                  ----------------------------------------------     --------------------------------
       10.36      Moore Haven Commons, Ltd. Amended and Restated     Exhibit 10.9 to Form 10-Q Report
                  Agreement of Limited Partnership                   dated December 30, 1990
                                                                     (File No. 33-31390)

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

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

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

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

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

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

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

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

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

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

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
         <S>                        <C>                                     <C>


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

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

       10.48      Amendment No.1 to the Summerfield Apartments       Exhibit 10.48 to Form 10-K Report
                  Limited Partnership Amended and Restated           dated March 30, 1998
                  Agreement of Limited Partnership                   (File No. 0-19217)

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

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

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

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

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

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

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

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


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

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

       27         Financial Data Schedule

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
        <S>                    <C>                                        <C>

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

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

       28.1       Pages 14 through 19 of Prospectus                  Exhibit 28.1
                  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 Prospectus  Exhibit 28.2 to Form 10-K Report
                                                                     dated March 30, 1991
                                                                     (File No. 33-31390)

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

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

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

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

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

    (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.

</TABLE>


<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.

<TABLE>
<CAPTION>
<S>                              <C>                            <C>

                                                     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, 1999                                /s/  Richard Paul Richman
        -------------                                -------------------------
                                                     by:  Richard Paul Richman
                                                          President
</TABLE>

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. <TABLE> <CAPTION>
               <S>                                           <C>                                          <C>

                 Signature                                     Title                                        Date


       /s/ Richard Paul Richman                  President, Chief Executive Officer                    June 28, 1999
       (Richard Paul Richman)                    and Director of the general partner
                                                 of the General Partner

       /s/ Neal Ludeke                           Vice President and Treasurer of                       June 28, 1999
       (Neal Ludeke)                             the general partner of the General
                                                 Partner (Principal Financial and
                                                 Accounting Officer of Registrant)

</TABLE>