It looks as if a bill has been proposed that is similar to the one Montana recently made into law and is passing through the Texas legislature now. Yes, it could allow full-auto, but the state of TN would have to pass the bill into law and without that provision. Montana, for example, passed their Firearms Act into law but it precludes automatic weapons, even if they are manufactured and sold within the state's borders.
I sincerely doubt our legislators would pass this into law without that provision. Heck, I have my doubts that our legislators have the balls to pass it with that provision, but I hope they will. It's about time the state-level politicians realized that they have MORE power than their federal counterparts...