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THERE'S PROGRESS, at last, in Albany on revitalization of one of New York's grandest underutilized resources, its canal system.

The Legislature is in agreement on giving first passage to a proposed constitutional amendment that should hasten redevelopment of the Erie and other canals that make up the system.

Action should be complete before the legislators adjourn.

One reason the state's canals have fallen on bad times is that they have been neglected. Another reason is that the state constitution contains restrictions virtually guaranteed to keep them from being redeveloped to fit an era of recreation rather than shipping.

Commercial interests cannot lease state lands along the canal for longer than a single year now, and the leases can be revoked upon 30 days' notice. What investor would build any permanent facilities under such chancy conditions? The simple answer is: none.

Also, incredibly, boaters cannot be charged fees for using the canal and its locks. None at all. Not surprisingly, too little money has gone to keep things shipshape.

The constitutional amendment would correct both these deficiencies. It would permit long-term leases of state lands for development, as well as user fees for boaters. It would also establish a dedicated fund to hold the fees received from canal users, and require that these revenues be spent only for "maintenance and development" of the canal system. And it would remove the State Department of Transportation as the only authorized operator of the canals.

All the powers in Albany -- Gov. Cuomo, the Senate and the Assembly -- apparently support redevelopment of the canal system. That's heartening, because its revitalization carries attractive potential for tourism, a big industry in New York, and enhanced recreational enjoyment for New Yorkers themselves.

In the Legislature, progress depends upon the leadership of two Western New Yorkers, Sen. John B. Sheffer II., R-Amherst, and Assemblyman Joseph T. Pillittere, D-Niagara Falls. They chair the tourism and recreation committees in their respective houses.

Nothing much can really be done until the amendments clear away the impediments in the state constitution. To do that, the Legislature must pass the proposed amendments this year and next, with final approval reserved to the public in a statewide referendum -- in November 1991 at the soonest.

With Senate and Assembly approval before adjournment this summer, the state will be both on schedule and on the right course. So far, so good.

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