AMERICAN TAX CREDIT PROPERTIES III LP - FORM 10-Q

Attached files

file	filename
EX-32.2 - SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LP	ex32-2.htm
EXCEL - IDEA: XBRL DOCUMENT - AMERICAN TAX CREDIT PROPERTIES III LP	Financial_Report.xls
EX-31.1 - SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LP	ex32-1.htm
EX-31.2 - RULE 13A-14(A)/15D-14(A) CERTIFICATION OF CHIEF EXECUTIVE OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LP	ex31-2.htm
EX-31.1 - RULE 13A-14(A)/15D-14(A) CERTIFICATION OF CHIEF FINANCIAL OFFICER. - AMERICAN TAX CREDIT PROPERTIES III LP	ex31-1.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 September 29, 2011

[ ] 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 November 3, 2011, 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

Item 4T. Internal Control Over Financial Reporting.	12

AMERICAN TAX CREDIT PROPERTIES III L.P.

BALANCE SHEETS

(UNAUDITED)

	September 29,			March 30,
	2011			2011

ASSETS

Cash and liquid investments

Cash and cash equivalents	$	247,447		$	310,706
Investment in Pemberwick Fund		1,110,696			1,130,477
Investment in bond		91,000			99,873

Total cash and liquid investments		1,449,143			1,541,056

Interest receivable		99			123

	$	1,449,242		$	1,541,179

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

Accounts payable and accrued expenses	$	327,579		$	372,270
Payable to general partner and affiliates		3,616,033			3,476,461

		3,943,612			3,848,731

Commitments and contingencies

Partners' equity (deficit)

General partner		(2,475,970	)		(2,319,896	)
Limited partners (35,883 units of limited partnership interest outstanding)		--			--
Accumulated other comprehensive income (loss)		(18,400	)		12,344

		(2,494,370	)		(2,307,552	)

	$	1,449,242		$	1,541,179

See Notes to Financial Statements.

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF OPERATIONS

THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 29, 2011 AND 2010

(UNAUDITED)

	Three Months Ended September 29,			Six Months Ended September 29,			Three Months Ended September 29,			Six Months Ended September 29,
	2011			2011			2010			2010

REVENUE

Interest	$	1,255		$	7,477		$	3,728		$	5,724
Other income from local partnerships		1,922			19,365			2,540			20,403

TOTAL REVENUE		3,177			26,842			6,268			26,127

EXPENSES

Administration fees		36,006			72,012			34,776			89,419
Management fees		36,006			72,011			34,777			89,419
Professional fees		16,052			32,518			16,256			33,436
State of New Jersey filing fee								4,581			8,901
Printing, postage and other		4,031			6,375			4,184			7,859

TOTAL EXPENSES		92,095			182,916			94,574			229,034

		(88,918	)		(156,074	)		(88,306	)		(202,907	)

Equity in income of investment in local partnerships								51,410			84,423

Loss prior to gain on sale of limited partner interests/local partnership properties		(88,918	)		(156,074	)		(36,896	)		(118,484	)

Gain on sale of limited partner interests/local partnership properties								49,042			49,042

NET INCOME (LOSS)		(88,918	)		(156,074	)		12,146			(69,442	)

Other comprehensive income (loss), net		(24,134	)		(30,744	)		7,977			5,336

COMPREHENSIVE INCOME (LOSS)	$	(113,052	)	$	(186,818	)	$	20,123		$	(64,106	)

NET INCOME (LOSS) ATTRIBUTABLE TO

General partner	$	(88,918	)	$	(156,074	)	$	12,146		$	(69,442	)
Limited partners		--			--			--			--

	$	(88,918	)	$	(156,074	)	$	12,146		$	(69,442	)

NET INCOME (LOSS) per unit of limited partnership interest (35,883 units of limited partnership interest)	$	--		$	--		$	--		$	--

See Notes to Financial Statements.

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED SEPTEMBER 29, 2011 AND 2010

(UNAUDITED)

	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received	$	13,644		$	8,194
Cash paid for
Administration fees		(4,451	)		(5,134	)
Professional fees		(62,749	)		(71,216	)
State of New Jersey filing fee		(10,923	)		(15,398	)
Printing, postage and other expenses		(9,912	)		(12,254	)

Net cash used in operating activities		(74,391	)		(95,808	)

CASH FLOWS FROM INVESTING ACTIVITIES

Investments in Pemberwick Fund		(8,233	)		(2,923	)
Investment in bond					(100,940	)
Distributions in connection with sale of limited partner interests/local partnership properties					649,628
Distributions received from local partnerships		19,365			20,403

Net cash provided by investing activities		11,132			566,168

Net increase (decrease) in cash and cash equivalents		(63,259	)		470,360

Cash and cash equivalents at beginning of period		310,706			312,127

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	247,447		$	782,487


SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES

Unrealized gain (loss) on investment in Pemberwick Fund	$	(28,014	)	$	3,607

Unrealized gain (loss) on investment in bond	$	(2,730	)	$	1,729

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

See Notes to Financial Statements.

AMERICAN TAX CREDIT PROPERTIES III L.P.

STATEMENTS OF CASH FLOWS - CONTINUED

SIX MONTHS ENDED SEPTEMBER 29, 2011 AND 2010

(UNAUDITED)

	2011			2010

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES

Net loss	$	(156,074	)	$	(69,442	)

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

Equity in income of investment in local partnerships					(84,423	)
Gain on sale of limited partner interests/local partnership properties					(49,042	)
Other income from local partnerships		(19,365	)		(20,403	)
Accrued interest purchased at date of investment in bond					1,750
Amortization of premium on investment in bond		6,143			819
Decrease (increase) in interest receivable		24			(99	)
Decrease in accounts payable and accrued expenses		(44,691	)		(48,672	)
Increase in payable to general partner and affiliates		139,572			173,704

NET CASH USED IN OPERATING ACTIVITIES	$	(74,391	)	$	(95,808	)

See Notes to Financial Statements.

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 29, 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 September 29, 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 six months ended September 29, 2011 are not necessarily indicative of the results that may be expected for the entire year.

Certain prior period balances have been reclassified to conform to the current period presentation.

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 September 29, 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 $2,194,000 as of November 2011. 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 $37,000 as of September 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 $9.89 per share as of September 29, 2011. An unrealized loss of $18,400 is reflected as accumulated other comprehensive loss in the accompanying unaudited balance sheet as of September 29, 2011. As of September 29, 2011, the Partnership has earned $16,205 of interest revenue from its investment in Pemberwick.

AMERICAN TAX CREDIT PROPERTIES III L.P.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

SEPTEMBER 29, 2011

(UNAUDITED)

4.	Investment in Bond

The Partnership carries its investment in bond as available-for-sale because such investment is used to facilitate and provide flexibility for its obligations, including resolving circumstances that may arise in connection with the Local Partnerships. Investment in bond is reflected in the accompanying unaudited balance sheets at estimated fair value and is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see Note 3). The bond was called on October 3, 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 September 29, 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.

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 September 29, 2011, American Tax Credit Properties III L.P. (the “Registrant”) has not experienced a significant change in financial condition as compared to March 30, 2011. 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 six months ended September 29, 2011, Registrant received cash from interest revenue and distributions from Local Partnerships, and utilized cash for operating expenses and investments in Pemberwick Fund (“Pemberwick”). Cash and cash equivalents, investment in Pemberwick and investment in bond decreased, in the aggregate, by approximately $92,000 during the six months ended September 29, 2011 (which includes unrealized losses on investment in Pemberwick and investment in bond in the aggregate of approximately $31,000 and amortization of premium on investment in bond of 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 $300,673 and payable to general partner and affiliates represents deferred management and administration fees in the accompanying unaudited balance sheet as of September 29, 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 September 29, 2011 and 2010 resulted in net income (loss) of $(88,918) and $12,146, respectively. The increase in net loss from fiscal 2010 to fiscal 2011 is primarily attributable to (i) a decrease in equity in income of investment in local partnerships of approximately $51,000, which is attributable to Registrant selling its Local Partnership Interest in NP-89 Limited Dividend Housing Association Limited Partnership (“NP-89”), the only Local Partnership in which Registrant had an investment balance, in August 2010 and (ii) gain on the sale of Registrant’s Local Partnership Interest in NP-89 of approximately $49,000 recognized in fiscal 2010. Other comprehensive loss for the three months ended September 29, 2011 resulted from an unrealized gain (loss) on investment in Pemberwick and investment in bond of $(24,657) and $523, respectively.

Registrant’s operations for the six months ended September 29, 2011 and 2010 resulted in net losses of $156,074 and $69,442, respectively. The increase in net loss from fiscal 2010 to fiscal 2011 is primarily attributable to (i) a decrease in equity in income of investment in local partnerships of approximately $84,000, which is attributable to Registrant selling its Local Partnership Interest in NP-89 in August 2010 and (ii) gain on the sale of Registrant’s Local Partnership Interest in NP-89 of approximately $49,000 recognized in fiscal 2010, all partially offset by a reduction in operating expenses of approximately $46,000. Other comprehensive loss for the six months ended September 29, 2011 resulted from unrealized losses on investment in Pemberwick and investment in bond of $28,014 and $2,730, respectively.

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 November 2011, 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. The 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 $2,194,000 as of November 2011. 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 $37,000 as of September 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.

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.

As noted above in Item 2 under Material Changes in Financial Condition, the bond owned by Registrant as of September 29, 2011 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.

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 September 29, 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 September 29, 2011.

Item 4T. Internal Control Over Financial Reporting.

There were no changes in Registrant’s internal control over financial reporting during the three months ended September 29, 2011 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

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.

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: November 3, 2011		/s/David Salzman
		By:David Salzman
		Chief Executive Officer



Dated: November 3, 2011		/s/James Hussey
		By:James Hussey
		Chief Financial Officer



Dated: November 3, 2011		/s/Richard Paul Richman
		By:Richard Paul Richman
		Sole Director

Attached files

AMERICAN TAX CREDIT PROPERTIES III LP Reports

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