1. Short title This Act may be cited as the Transportation Funding Fairness Act . 2. Treatment of certain loans in consideration for fixed guideway capital investment grants (a) In general Section 603(b)(8) of title 23, United States Code, is amended to read as follows: (8) Non-Federal share (A) In general A State or other eligible sponsor may elect to have proceeds of a covered loan treated as any non-Federal share of project costs required under this title or chapter 53 of title 49, if the loan is repayable from non-Federal funds. (B) Covered loan In this subparagraph, the term covered loan means— (i) a secured loan under the TIFIA program; and (ii) a loan issued pursuant to the railroad rehabilitation and improvement financing program authorized under sections 501 through 503 of the Railroad Revitalization and Regulatory Reform Act of 1976 ( 45 U.S.C. 821–823 ). . (b) Special rule for fixed guideway capital investment grants Section 5309(f) of title 49, United States Code, is amended by adding at the end the following: (3) Special rule for proceeds of a covered loan (A) In general In making the determination and assessment pursuant to paragraphs (1) and (2), the Secretary— (i) shall treat proceeds of a covered loan that a State has elected to treat as a non-Federal share of project costs pursuant to section 603(b)(8) of title 23, United States Code, as a local financial commitment; and (ii) may not treat any such proceeds as non-local sources of capital and operating financing. (B) Covered loan In this subsection, the term covered loan means— (i) a secured loan under the TIFIA program (as such term is defined in section 601 of title 23, United States Code); and (ii) a loan issued pursuant to the railroad rehabilitation and improvement financing program authorized under sections 501 through 503 of the Railroad Revitalization and Regulatory Reform Act of 1976 ( 45 U.S.C. 821–823 ). .