1. Short title This Act may be cited as the Property Tax Reduction Act of 2017 . 2. Reduction of Federal financial participation (FFP) for certain States that require political subdivisions to contribute toward non-Federal share of Medicaid (a) In general Section 1903 of the Social Security Act ( 42 U.S.C. 1396b ) is amended by adding at the end the following new subsection: (aa) Reduction in FFP for contributions required by political subdivisions (1) In general Notwithstanding the previous provisions of this section, in the case of a State that had a DSH allotment under section 1923(f) for fiscal year 2016 that was more than 6 times the national average of such allotments for all the States for such fiscal year and that requires political subdivisions within the State to contribute funds towards medical assistance or other expenditures under the State plan under this title (or under a waiver of such plan) for a quarter in a fiscal year (beginning with fiscal year 2020), in determining the amount that is payable to the State for expenditures in such quarter under subsection (a)(1), the amount of such expenditures shall be decreased by the amount that political subdivisions in the State are required to contribute under the plan (or waiver) without reimbursement from the State for such quarter, other than contributions described in paragraph (2). (2) Excepted contributions The contributions described in this paragraph for a fiscal year are the following: (A) Contributions required by a State from a political subdivision that, as of the first day of the calendar year in which the fiscal year involved begins— (i) has a population of more than 5,000,000, as estimated by the Bureau of the Census; and (ii) imposes a local income tax upon its residents. (B) Contributions required by a State from a political subdivision for administrative expenses if the State required such contributions from such subdivision without reimbursement from the State as of January 1, 2017. .