1Heat oven to 400ºF. Crush lemon drops in food processor or blender. In large bowl, beat butter, 1/2 cup powdered sugar, the lemon peel and lemon extract with electric mixer on medium speed, or mix with spoon. Stir in flour, 1/4 cup of the crushed lemon drops and the salt.
2Shape dough into 1-inch balls. Place about 2 inches apart on ungreased cookie sheet.
3Bake cookies 8 to 9 minutes or until set but not brown. Immediately remove from cookie sheet; roll in powdered sugar. Cool 10 minutes; roll in remaining crushed lemon drops. Cool completely on wire rack, about 30 minutes. Reroll in crushed lemon drops if desired.