Heat oven 300°F. Beat butter, sugar, eggs, and lemon peel in large bowl until well blended. Stir together flour, baking powder, and salt; gradually add to lemon mixture, beating until blended. Stir in coconut. Cover; refrigerate dough about 1 hour or until firm enough to handle. Shape into 1-inch balls; roll in powdered sugar. Place 2 inches apart on ungreased cookie sheet. Bake 15-18 minutes or until edges are set. Immediately remove from cookie sheet to wire rack. Cool completely. Store in tightly covered container in cool, dry place.