Gov. Jon Huntsman Jr. and Utah legislative leaders have a tentative plan to reform state income taxes and give long-range funding to TRAX extensions in Salt Lake County and commuter rail from Weber County to Utah County.

GOP leaders in the state House and Senate met privately for nearly two hours during the Legislature's trip to the Uinta Basin the past two days, with House Speaker Greg Curtis, R-Sandy, and Senate President John Valentine, R-Orem, agreeing to call a daylong caucus meeting of their GOP members in early September to discuss the proposals, both men said Tuesday afternoon.

Huntsman spokesman Mike Mower and Curtis said leaders are looking at a "comprehensive" approach to two of the largest public policy issues now before the 104 part-time lawmakers: income tax reform and mass transportation.

If the daylong caucuses can lead to a "settlement on some of these issues," Curtis said, then Huntsman will call a mid-September special session where legislators can vote on tax cuts, tax reform and transit funding.

"The governor is excited to be advancing these plans, which will likely be debated in a special session this fall," Mower said.

The three-prong approach Huntsman and House leaders are pushing involves:

• First, adopt a dual-track state personal income tax system. House leaders agree to support the so-called Option C income tax reform put forward by Huntsman. The current progressive tax system would have the income brackets widened, thus lowering taxes for everyone and knocking the poorest Utahns off the state tax rolls. As is the case now, that system keeps current deductions and exemptions.

Or taxpayers could pick a 5 percent flat rate system that does not have any deductions or exemptions. Officials estimate Option C will be a $122 million tax cut when fully implemented.

• Second, lawmakers would let voters in Utah Transit Authority areas approve a quarter-cent increase in the sales tax dedicated to mass transit. That sales tax money would supplant a nearly $900 million property tax bond for TRAX extensions for which Salt Lake County Council members finalized the ballot language Tuesday.

"We (House leaders) much prefer the sales tax — which has historically gone to mass transit — rather than a property tax bond" for TRAX, said Curtis.

• Third, a slight increase in Salt Lake County's transient room tax originally awarded for the Real Salt Lake soccer stadium (killed by County Council members) would go instead to UTA, earmarked to build 30 miles of commuter rail lines in Salt Lake County.