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or financial assistance, to penalize or withhold licenses, permits, certifications, accreditation, contracts, grants, guarantees, tax-exempt status, or any benefits or exemptions from that employer, or to prohibit the employer's participation in programs or activities sponsored by that Federal, State, or local agency. Nothing in this subsection shall be construed to invalidate any other Federal, State, or local law (including a regulation) that otherwise applies to a religious employer exempt under this section.

SEC. 7. NONAPPLICATION TO MEMBERS OF THE ARMED FORCES; VETERANS' PREFERENCES.

(a) Armed Forces.—

(1) Employment.—In this Act, the term "employment" does not apply to the relationship between the United States and members of the Armed Forces.
(2) Armed forces.—In paragraph (1) the term "Armed Forces" means the Army, Navy, Air Force, Marine Corps, and Coast Guard.

(b) Veterans' Preferences.—This title does not repeal or modify any Federal, State, territorial, or local law creating a special right or preference concerning employment for a veteran.

†S 815 ES