This is partially true. NY State Police implemented a policy of not using unmarked cars for traffic patrol. I don't think its a law and it might have changed since it was implemented in the 90's, but when I was living there (until last summer) I never saw an unmarked police car stopping someone on any of the major highways (where the state police do most of their patrolling). However, they did use camaros, jeeps, and who knows what else. A lot of the cars also have the internal lights and not the roof racks.

Local departments do not necessarily follow this policy. I know that this was the case both where I lived before I left (Ithaca in upstate NY) where I saw at least one black Suburban who had pulled someone over and downstate where my parents live (Rockland County) where there were a bunch of cars with internal lights and no markings.