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EX-31.1 - RULE 13A-14(A)/15D-14(A) CERTIFICATION OF CHIEF EXECUTIVE OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LPex31-1.htm
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EX-32.1 - SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LPex32-1.htm
EX-32.2 - SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER - AMERICAN TAX CREDIT PROPERTIES III LPex32-2.htm


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


FORM 10-Q

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

For the Quarterly Period Ended December 30, 2011

OR

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

For the Transition Period from  _______________ to ______________

Commission File Number: 0-19217

 
American Tax Credit Properties III L.P.
(Exact Name of Registrant as Specified in its Charter)

                             Delaware
  13-3545006
(State or Other Jurisdiction of Organization)
(I.R.S. Employer Incorporation or Identification No.)
   
Richman Tax Credit Properties III L.P.
 
340 Pemberwick Road
 
Greenwich, Connecticut
06831
(Address of Principal Executive Offices)
(Zip Code)

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

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

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

Yes    X     No ___  

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

Large Accelerated Filer ___Accelerated Filer___Non-Accelerated Filer___ Smaller Reporting Company    X 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___  No    X                                

As of January 26, 2012, there are 35,883 units of limited partnership interest outstanding.
 
 
 

 
AMERICAN TAX CREDIT PROPERTIES III L.P.

PART I - FINANCIAL INFORMATION


Table of Contents
 
   
Page
     
Item 1.
Financial Statements.
 
     
Balance Sheets
3
     
Statements of Operations
4
     
Statements of Cash Flows
5
     
Notes to Financial Statements
7
     
Item 2.
Management’s Discussion and Analysis of Financial
 
 
Condition and Results of Operations.
9
     
Item 3.
Quantitative and Qualitative Disclosure About Market Risk.
11
     
Item 4.
Controls and Procedures.
12
 
 
2

 

AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
(UNAUDITED)
 
   
December 30,
   
March 30,
 
   
2011
   
2011
 
             
ASSETS
           
             
Cash and liquid investments
           
             
Cash and cash equivalents
  $ 71,616     $ 310,706  
Investment in Pemberwick Fund
    872,932       1,130,477  
Investment in bond
            99,873  
                 
Total cash and liquid investments
    944,548       1,541,056  
                 
Interest receivable
            123  
                 
    $ 944,548     $ 1,541,179  
                 
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
               
                 
Liabilities
               
                 
Accounts payable and accrued expenses
  $ 236,863     $ 372,270  
Payable to general partner and affiliates
    3,285,067       3,476,461  
                 
      3,521,930       3,848,731  
                 
Commitments and contingencies
               
                 
Partners' equity (deficit)
               
                 
General partner
    (2,560,781 )     (2,319,896 )
Limited partners (35,883 units of limited partnership interest outstanding)
    --       --  
Accumulated other comprehensive income (loss)
    (16,601 )     12,344  
                 
      (2,577,382 )     (2,307,552 )
                 
    $ 944,548     $ 1,541,179  
 
See Notes to Financial Statements.

 
3

 

AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
THREE AND NINE MONTH PERIODS ENDED DECEMBER 30, 2011 AND 2010
(UNAUDITED)

   
Three Months
Ended
December 30,
   
Nine Months
Ended
 December 30,
   
Three Months
Ended
December 30,
   
Nine Months
Ended
December 30,
 
   
2011
   
2011
   
2010
   
2010
 
                         
REVENUE
                       
                         
Interest
  $ 870     $ 8,347     $ 4,191     $ 9,915  
Other income from local partnerships
    2,243       21,608       2,243       22,646  
                                 
TOTAL REVENUE
    3,113       29,955       6,434       32,561  
                                 
EXPENSES
                               
                                 
Administration fees
    36,006       108,018       78,610       168,029  
Management fees
    36,006       108,017       78,611       168,030  
Professional fees
    14,841       47,359       13,421       46,857  
State of New Jersey filing fee
                    4,363       13,264  
Printing, postage and other
    1,071       7,446       5,755       13,614  
                                 
TOTAL EXPENSES
    87,924       270,840       180,760       409,794  
                                 
      (84,811 )     (240,885 )     (174,326 )     (377,233 )
                                 
Equity in income of investment in local partnerships
                    15,171       99,594  
                                 
Loss prior to gain (loss) on sale of limited partner interests/local partnership properties
    (84,811 )     (240,885 )     (159,155 )     (277,639 )
                                 
Gain (loss) on sale of limited partner interests/local partnership properties
                    (15,171 )     33,871  
                                 
NET LOSS
    (84,811 )     (240,885 )     (174,326 )     (243,768 )
                                 
Reclassification of unrealized gain on investment in bond
            (2,730 )                
Other comprehensive income (loss), net
    1,799       (26,215 )     1,235       6,571  
                                 
COMPREHENSIVE LOSS
  $ (83,012 )   $ (269,830 )   $ (173,091 )   $ (237,197 )
                                 
NET LOSS ATTRIBUTABLE TO
                               
                                 
General partner
  $ (84,811 )   $ (240,885 )   $ (174,326 )   $ (243,768 )
Limited partners
    --       --       --       --  
                                 
    $ (84,811 )   $ (240,885 )   $ (174,326 )   $ (243,768 )
                                 
NET LOSS per unit of limited partnership interest (35,883 units of limited partnership interest)
  $  --     $  --     $  --     $  --  
 
See Notes to Financial Statements.

 
4

 
 
 
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 30, 2011 AND 2010
(UNAUDITED)
 
   
2011
   
2010
 
             
CASH FLOWS FROM OPERATING ACTIVITIES
           
             
Interest received
  $ 14,613     $ 10,757  
Cash paid for
               
Administration fees
    (407,429 )     (146,600 )
Management fees
    (100,000 )     (140,000 )
Professional fees
    (67,699 )     (77,989 )
State of New Jersey filing fee
    (10,923 )     (15,398 )
Printing, postage and other expenses
    (11,590 )     (15,185 )
                 
Net cash used in operating activities
    (583,028 )     (384,415 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
                 
Investments in Pemberwick Fund
    (12,325 )     (4,888 )
Redemptions from Pemberwick Fund
    243,655          
Proceeds from redemption of investment in bond
    91,000          
Investment in bond
            (100,940 )
Proceeds in connection with sale of limited partner interests/local partnership properties
            649,628  
Distributions received from local partnerships
    21,608       22,646  
                 
Net cash provided by investing activities
    343,938       566,446  
                 
Net increase (decrease) in cash and cash equivalents
    (239,090 )     182,031  
                 
Cash and cash equivalents at beginning of period
    310,706       312,127  
                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 71,616     $ 494,158  
                 
                 
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES
               
                 
Unrealized gain (loss) on investment in Pemberwick Fund
  $ (26,215 )   $ 3,090  
                 
Reclassification of unrealized gain on investment in bond
  $ (2,730 )        
                 
Unrealized gain on investment in bond
          $ 3,481  

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

 
5

 


AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS - CONTINUED
NINE MONTHS ENDED DECEMBER 30, 2011 AND 2010
(UNAUDITED)
 
 
2011
   
2010
         
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
           
             
Net loss
  $ (240,885 )   $ (243,768 )
                 
Adjustments to reconcile net loss to net cash used in operating activities
               
                 
Equity in income of investment in local partnerships
            (99,594 )
Gain on sale of limited partner interests/local partnership properties
            (33,871 )
Other income from local partnerships
    (21,608 )     (22,646 )
Accrued interest purchased at date of investment in bond
            1,750  
Amortization of premium on investment in bond
    1,229       1,433  
Loss on redemption of investment in bond
    4,914          
Decrease (increase) in interest receivable
    123       (2,341 )
Decrease in accounts payable and accrued expenses
    (135,407 )     (174,837 )
Increase (decrease) in payable to general partner and affiliates
    (191,394 )     189,459  
                 
NET CASH USED IN OPERATING ACTIVITIES
  $ (583,028 )   $ (384,415 )
 
See Notes to Financial Statements.

 
6

 

AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2011
(UNAUDITED)

1.
Basis of Presentation

The accompanying unaudited financial statements of American Tax Credit Properties III L.P. (the “Partnership”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  They do not include all information and footnotes required by GAAP for complete financial statements.  The results of operations are impacted, in part, by the combined results of operations of the Local Partnerships, which are provided by the Local Partnerships on an unaudited basis during interim periods.  Accordingly, the accompanying unaudited financial statements are dependent on such unaudited information.  In the opinion of the General Partner, the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of December 30, 2011 and the results of operations and cash flows for the interim periods presented.  All adjustments are of a normal recurring nature.  The results of operations for the nine months ended December 30, 2011 are not necessarily indicative of the results that may be expected for the entire year.

2.
Investment in Local Partnerships

The Partnership originally acquired limited partner interests (the “Local Partnership Interests”) in forty-three Local Partnerships representing capital contributions in the aggregate amount of $29,384,966, which includes voluntary advances made to a certain Local Partnership and all of which has been paid.  As of December 30, 2011, the Partnership holds a Local Partnership Interest in thirty-five Local Partnerships.  The Partnership has no legal obligation to fund any operating deficits of the Local Partnerships.

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

The Local General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner of Queen Lane regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner of Queen Lane requested that the Agency cancel the Section 8 voucher contract in connection with the Property.  As a result, the Property has been vacant since October 2007.  Two of Queen Lane’s mortgages matured in 2007 but have not been repaid or formally extended, representing principal and accrued interest of approximately $2,216,000 as of January 2012.  The Local General Partner of Queen Lane further represents that the lender has not issued a notice of default and that real estate taxes are in arrears approximately $57,000 as of December 2011.  The Local General Partner of Queen Lane is attempting to refinance the mortgages and make the necessary repairs to the Property.  The Partnership’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001.

3.
Investment in Pemberwick Fund

The Partnership carries its investment in Pemberwick Fund (“Pemberwick”) at estimated fair value.  The fair value of the Partnership’s investment in Pemberwick is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements as defined in Accounting Standards Codification (“ASC”) Topic 820.  Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access.  Pemberwick’s net asset value (“NAV”) is $9.88 per share as of December 30, 2011.  An unrealized loss of $16,601 is reflected as accumulated other comprehensive loss in the accompanying unaudited balance sheet as of December 30, 2011.  As of December 30, 2011, the Partnership has earned $16,642 of interest revenue from its investment in Pemberwick.

 
7

 
 
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 30, 2011
(UNAUDITED)

4.
Investment in Bond

The Partnership carried its investment in bond as available-for-sale because such investment was used to facilitate and provide flexibility for its obligations.  Investment in bond was reflected in the accompanying unaudited balance sheet as of March 30, 2011 at estimated fair value and was classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see Note 3).  The bond was called during the nine months ended December 30, 2011; accordingly, there is no accumulated other comprehensive income or loss associated with the Partnership’s investment in bond in the accompanying unaudited balance sheet as of December 30, 2011.  The Partnership’s cumulative annualized return on the bond for the sixteen month holding period totaled approximately 2.94%.

5.
Additional Information

Additional information, including the audited March 30, 2011 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 30, 2011 on file with the Securities and Exchange Commission.
 
 
8

 

AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Material Changes in Financial Condition

As of December 30, 2011, American Tax Credit Properties III L.P. (the “Registrant”) experienced a significant change in financial condition as compared to March 30, 2011, primarily the result of the payment of deferred management and administration fees during the period.  Principal changes in assets are comprised of periodic transactions and adjustments.  Registrant owns a limited partner interest (the “Local Partnership Interests”) in local partnerships (the “Local Partnerships”), which own low-income multifamily residential complexes (the “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”).  During the nine months ended December 30, 2011, Registrant received cash from interest revenue, the redemption of its investment in bond, redemptions from Pemberwick Fund (“Pemberwick”) and distributions from Local Partnerships, and utilized cash for operating expenses and investments in Pemberwick.  Cash and cash equivalents, investment in Pemberwick and investment in bond decreased, in the aggregate, by approximately $597,000 during the nine months ended December 30, 2011 (which includes an unrealized loss on investment in Pemberwick and the reclassification of unrealized gain on investment in bond in the aggregate of approximately $29,000 and amortization of premium on investment in bond and the write-off of the remaining unamortized premium on the date the bond was redeemed totaling approximately $6,000).  The bond owned by Registrant was called on October 3, 2011 at par; Registrant’s cumulative annualized return on the bond for the sixteen month holding period totaled approximately 2.94%.  Accordingly, Registrant did not experience any adverse impact in connection with such investment.  Accounts payable and accrued expenses includes deferred administration fees of $200,673 and payable to general partner and affiliates represents deferred management and administration fees in the accompanying unaudited balance sheet as of December 30, 2011.

Results of Operations

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

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

Registrant’s operations for the three months ended December 30, 2011 and 2010 resulted in net losses of $84,811 and $174,326, respectively.  The decrease in net loss from fiscal 2010 to fiscal 2011 is primarily attributable to a decrease in administration fees and management fees in the cumulative amount of approximately $85,000 resulting, in part, from the correction of an under accrual as of March 30, 2010. Other comprehensive income for the three months ended December 30, 2011 resulted from an unrealized gain on investment in Pemberwick of $1,799.

Although Registrant’s operations for the nine months ended December 30, 2011 and 2010 have not varied significantly, as reflected by the net losses of $240,885 and $243,768, respectively, administration fees and management fees decreased in the cumulative amount of approximately $120,000 resulting, in part, from the correction of an under accrual as of March 30, 2010.  In addition, equity in income of investment in local partnerships decreased by approximately $100,000, which is attributable to Registrant selling its Local Partnership Interest in NP-89 Limited Dividend Housing Association Limited Partnership (“NP-89”) in August 2010. Registrant’s sale of its Local Partnership Interest in NP-89 resulted in a gain of approximately $34,000 recognized in fiscal 2010.  Other comprehensive loss for the nine months ended December 30, 2011 resulted from an unrealized loss on investment in Pemberwick and the reclassification of unrealized gain on investment in bond of $26,215 and $2,730, respectively.

 
9

 

AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Local Partnership Matters

Registrant's primary objective, to provide Low-income Tax Credits to its limited partners (the “Limited Partners”), has been completed.  The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”).  The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2003.  The required holding period of each Property, in order to avoid Low-income 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 Compliance Period of all of the Local Partnerships had expired as of December 31, 2007.  In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”). Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.  Registrant is in the process of disposing of its Local Partnership Interests.  As of January 2012, Registrant owns thirty-five of the forty-three Local Partnership Interests originally acquired.  Registrant has served a demand on the local general partners (the “Local General Partners”) of all remaining Local Partnerships to commence a sale process to dispose of the Properties.  In the event a sale cannot be consummated, it is the General Partner’s intention to sell or assign Registrant’s Local Partnership Interests.  Following the final disposition of its Local Partnership Interests, Registrant intends to dissolve.  It is uncertain as to the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.  There can be no assurance as to when Registrant will dispose of its remaining Local Partnership Interests.

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and in Puerto Rico. Many of the Local Partnerships receive rental subsidy payments; such subsidy agreements expire at various times. 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.  Such changes could adversely affect the future net operating income (“NOI”) before debt service and debt structure of any or all Local Partnerships currently receiving such subsidies.

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

The Local General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a result of a dispute between the local housing agency (the “Agency”) and the Local General Partner of Queen Lane regarding the adequacy of certain unit repairs mandated by the Agency, the Local General Partner of Queen Lane requested that the Agency cancel the Section 8 voucher contract in connection with the Property.  As a result, the Property has been vacant since October 2007.  Two of Queen Lane’s mortgages matured in 2007 but have not been repaid or formally extended, representing principal and accrued interest of approximately $2,216,000 as of January 2012.  The Local General Partner of Queen Lane further represents that the lender has not issued a notice of default and that real estate taxes are in arrears approximately $57,000 as of December 2011.  The Local General Partner of Queen Lane is attempting to refinance the mortgages and make the necessary repairs to the Property.  Registrant’s investment balance in Queen Lane, after cumulative equity losses, became zero during the year ended March 30, 2001.

 
10

 

AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Critical Accounting Policies and Estimates

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

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

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

Forward-Looking Information

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

Item 3.  Quantitative and Qualitative Disclosure About Market Risk.

Registrant’s investment in Pemberwick is subject to certain risk.  The fixed income securities in which Pemberwick invests are subject to interest rate risk, credit risk, prepayment risk, counterparty risk, municipal securities risk, liquidity risk, management risk, government security risk and valuation risk.  Typically, when interest rates rise, the market prices of fixed income securities go down.  Pemberwick is classified as “non-diversified,” and thus may invest most of its assets in securities issued by or representing a small number of issuers.  As a result, Pemberwick may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.  These risks could adversely affect Pemberwick’s net asset value (“NAV”), yield and total return. An unrealized loss of $16,601 is reflected as accumulated other comprehensive loss in the accompanying unaudited balance sheet as of December 30, 2011.  As of December 30, 2011, Registrant has earned $16,642 of interest revenue from its investment in Pemberwick.

 
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AMERICAN TAX CREDIT PROPERTIES III L.P.

Item 4.  Controls and Procedures.

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

Registrant has carried out an evaluation, under the supervision and the participation of its management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the three months ended December 30, 2011.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of the general partner of the General Partner concluded that Registrant’s disclosure controls and procedures were effective as of December 30, 2011.

There were no changes in Registrant’s internal control over financial reporting during the three months ended December 30, 2011 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

 
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AMERICAN TAX CREDIT PROPERTIES III L.P.

Part II - OTHER INFORMATION

Item 1.
Legal Proceedings.
   
 
None.
   
Item 1A.
Risk Factors.
   
 
There have been no material changes from the risk factors previously disclosed in Item 1A of Registrant’s Annual Report on Form 10-K for the year ended March 30, 2011.
   
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
   
 
None.
   
Item 3.
Defaults Upon Senior Securities.
   
 
None; see Item 2 of Part I regarding the mortgage default of a certain Local Partnership.
   
Item 4.
Removed and Reserved.
   
Item 5.
Other Information.
   
 
None.
   
Item 6.
Exhibits.
   
 
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
 
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
 
Exhibit 32.1 - Section 1350 Certification of Chief Executive Officer.
 
Exhibit 32.2 - Section 1350 Certification of Chief Financial Officer.
 
Exhibit 101.ins - XBRL Instance.
 
Exhibit 101.xsd - XBRL Schema.
 
Exhibit 101.cal - XBRL Calculation.
 
Exhibit 101.def - XBRL Definition.
 
Exhibit 101.lab - XBRL Label.
 
Exhibit 101.pre - XBRL Presentation.
 
 
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SIGNATURES


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

   
 
AMERICAN TAX CREDIT PROPERTIES III L.P.
 
(a Delaware limited partnership)
   
 
By:Richman Tax Credit Properties III L.P.,
 
  General Partner
   
 
By:Richman Housing Credits Inc.,
 
  general partner
   
   
Dated: January 26, 2012
/s/David Salzman
 
By:David Salzman
 
  Chief Executive Officer
   
   
   
Dated: January 26, 2012
/s/James Hussey
 
By:James Hussey
 
  Chief Financial Officer
   
   
   
Dated: January 26, 2012
/s/Richard Paul Richman
 
By:Richard Paul Richman
 
  Sole Director
   
   
   
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