What does 3 years fixed sentence mean.

It means serving three years... no time off for good behavior, etc... There are certain offences that have mandated minimum sentencing, its possible this falls under one of those.

Is it a state or federal sentence (if in the US) if not in the US where is it.
While the term generally means, as smoothy said, you will serve the full 3 years in prison. There may be slight changes or allowances in some areas.