I believe the answer is yes. I believe that only "in good standing" PTAs are eligible for official Reflections district-level/state-level/national awards.
As KC notes, it's pretty common for local groups to put on their own art awards program.
Click on the search link above, and search all open forums for Reflections. I know other people have discussed their local Reflections-like contests before.
Is Reflections a big deal in your school? While many schools around here emphasize the Citizenship Contest, it seems that Reflections is not nearly as big. At the old school, the teachers used to assign the Citizenship Contest, but in six years we never had Reflections.
If our PTA disbands and becomes a PTO, does it mean we also abandon the Reflections program? Does anyone out there have experience with this issue? I suppose we could just run a contest in our own school, and not move up to the district level. How do other PTO's deal with Reflections?