(a) The board may make a grant under this subchapter to a hospital-based nursing education partnership only if the board determines that:
(1) the partnership will meet applicable board and Texas Board of Nursing standards for instruction and student competency for the associate, bachelor of science, or master of science nursing degree granted by each nursing education program participating in the partnership;
(2) each nursing education program participating in the partnership will, as a result of the partnership, enroll in the nursing education program a sufficient number of additional students as established by the board;
(3) the marginal cost to the state of producing a graduate of a nursing education program participating in the partnership will be comparable, as determined under criteria established by board rule, to the marginal cost to the state of producing a graduate of a nursing education program not participating in a partnership;
(4) each hospital participating in a partnership with a nursing education program will provide to students enrolled in the program clinical placements that:
(A) allow the students to take part in providing or to observe, as appropriate, medical services offered by the hospital; and
(B) meet the clinical education needs of the students; and
(5) the partnership will satisfy any other requirement established by board rule.
(b) In establishing the cost-comparison criteria under Subsection (a)(3), the board shall exclude reasonable development and initial implementation costs for the infrastructure necessary to support a hospital-based nursing education partnership.

(c) A grant under this subchapter may be spent only on costs related to the development or operation of a hospital-based nursing education partnership that:
(1) prepares a student to earn an associate or bachelor of science degree in nursing and to achieve initial licensure as a registered nurse, including by providing an accelerated program to prepare a student to earn a bachelor of science degree in nursing;
(2) prepares a student to earn a master of science degree in nursing with a concentration in education; or
(3) provides an articulation program providing for advancement from an associate degree to a bachelor of science degree in nursing or to a master of science degree in nursing with a concentration in education.
(d) A hospital-based nursing education partnership shall return to the board money granted to the partnership under this subchapter that the partnership does not spend on eligible costs under Subsection (c). As the board determines appropriate to best achieve the purposes of these programs, the board may:
(1) use the money to make grants to other hospital-based nursing education partnerships;
(2) use the money to make grants under the professional nursing shortage reduction program established under Subchapter Z; or
(3) transfer the money to the permanent fund for higher education nursing, allied health, and other health-related programs established under Subchapter C, Chapter 63, for use in making grants under that subchapter.