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1. Position a rack in middle of oven. Preheat oven to 350 degrees F. Line a baking sheet with parchment. Set out six additional large pieces of parchment.
2. In a food processor process the 3/4 cup plus 2 tablespoons powdered sugar, rosemary, lemon peel, and salt. Cover and process for 2 to 4 minutes or until rosemary is pulverized into very fine bits but is not pureed. Reserve 6 tablespoons of the rosemary-sugar mixture; set aside.
3. In a large bowl combine remaining rosemary-sugar, butter, granulated sugar, orange juice, and vanilla. Beat with an electric mixer on medium speed about 2 minutes or until well blended and lightened in color; scraping sides of bowl occasionally. Beat in as much of the flour as you can with the mixer. Stir in any remaining flour until smoothly incorporated.
4. Divide dough into thirds. Roll each portion to a 1/4-inch thickness between 2 pieces of parchment. Check undersides; smooth out wrinkles on parchment. Layer dough portions with parchment between on the baking sheet. Refrigerate for 1 hour until firm. (To speed chilling, freeze for 20 to 30 minutes.)
5. Working with one dough portion (keep others chilled), peel off one piece of parchment; pat dough back into place. Invert dough; peel off and discard second piece of parchment. Using a 3-inch tree cutter, cut out dough. Using a spatula, gently lift and place cookies about 2 inches apart on baking sheets. If dough becomes too soft to work with, return it to the refrigerator or freezer until firm.
6. Bake one sheet at a time for 8 to 11 minutes, or until edges are just beginning to brown (watch carefully as they brown rapidly near the end of baking). Let cool 3 minutes to firm up. Using a wide spatula, gently transfer cookies to wire rack. Cool completely before icing.
7. For icing, use a spatula to press reserved rosemary-sugar mixture through a very fine sieve into a small, deep bowl. Add the 2 cups powdered sugar and 2 to 3 tablespoons water. Stir until well blended and smooth. If necessary, stir in more water or more powdered sugar until desired piping consistency.
8. Place cookies, slightly separated, on a wire rack set over waxed paper. Using a piping bag fitted with a fine writing tip,* pipe around cookie edge. Sprinkle with gold sugar. Let stand until the icing sets, at least 30 minutes. Thin remaining icing with water; fill in the piped borders. Let stand at least 30 minutes more (preferably longer before packing airtight).