diff --git a/modules/folders/main.tf b/modules/folders/main.tf
index 920f712d29..3b2bbe8b97 100644
--- a/modules/folders/main.tf
+++ b/modules/folders/main.tf
@@ -16,7 +16,7 @@
 
 locals {
   folders = [for name in var.names : google_folder.folders[name]]
-  iam_pairs = flatten([
+  iam_pairs = var.iam_roles == null ? [] : flatten([
     for name, roles in var.iam_roles :
     [for role in roles : { name = name, role = role }]
   ])
@@ -24,6 +24,7 @@ locals {
     for pair in local.iam_pairs :
     "${pair.name}-${pair.role}" => pair
   }
+  iam_members = var.iam_members == null ? {} : var.iam_members
 }
 
 resource "google_folder" "folders" {
@@ -46,7 +47,7 @@ resource "google_folder_iam_binding" "authoritative" {
   folder   = google_folder.folders[each.value.name].name
   role     = each.value.role
   members = lookup(
-    lookup(var.iam_members, each.value.name, {}), each.value.role, []
+    lookup(local.iam_members, each.value.name, {}), each.value.role, []
   )
 }
 
diff --git a/modules/folders/variables.tf b/modules/folders/variables.tf
index 9489bdacb5..742031633c 100644
--- a/modules/folders/variables.tf
+++ b/modules/folders/variables.tf
@@ -17,13 +17,13 @@
 variable "iam_members" {
   description = "List of IAM members keyed by folder name and role."
   type        = map(map(list(string)))
-  default     = {}
+  default     = null
 }
 
 variable "iam_roles" {
   description = "List of IAM roles keyed by folder name."
   type        = map(list(string))
-  default     = {}
+  default     = null
 }
 
 variable "names" {
diff --git a/tests/modules/folders/__init__.py b/tests/modules/folders/__init__.py
new file mode 100644
index 0000000000..6913f02e36
--- /dev/null
+++ b/tests/modules/folders/__init__.py
@@ -0,0 +1,13 @@
+# Copyright 2020 Google LLC
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#      http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
diff --git a/tests/modules/folders/fixture/main.tf b/tests/modules/folders/fixture/main.tf
new file mode 100644
index 0000000000..4848ec5aa4
--- /dev/null
+++ b/tests/modules/folders/fixture/main.tf
@@ -0,0 +1,23 @@
+/**
+ * Copyright 2020 Google LLC
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+module "test" {
+  source      = "../../../../modules/folders"
+  parent      = "organizations/12345678"
+  names       = ["folder-a", "folder-b"]
+  iam_members = var.iam_members
+  iam_roles   = var.iam_roles
+}
diff --git a/tests/modules/folders/fixture/variables.tf b/tests/modules/folders/fixture/variables.tf
new file mode 100644
index 0000000000..02fb11081c
--- /dev/null
+++ b/tests/modules/folders/fixture/variables.tf
@@ -0,0 +1,25 @@
+/**
+ * Copyright 2020 Google LLC
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+variable "iam_members" {
+  type    = map(map(list(string)))
+  default = null
+}
+
+variable "iam_roles" {
+  type    = map(list(string))
+  default = null
+}
diff --git a/tests/modules/folders/test_plan.py b/tests/modules/folders/test_plan.py
new file mode 100644
index 0000000000..fcb8fa64d7
--- /dev/null
+++ b/tests/modules/folders/test_plan.py
@@ -0,0 +1,49 @@
+# Copyright 2020 Google LLC
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#      http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+
+import os
+import pytest
+
+
+FIXTURES_DIR = os.path.join(os.path.dirname(__file__), 'fixture')
+
+
+def test_folder(plan_runner):
+  "Test folder resources."
+  _, resources = plan_runner(FIXTURES_DIR)
+  assert len(resources) == 2
+  assert set(r['type'] for r in resources) == set(['google_folder'])
+  assert set(r['values']['display_name'] for r in resources) == set([
+      'folder-a', 'folder-b'
+  ])
+  assert set(r['values']['parent'] for r in resources) == set([
+      'organizations/12345678'
+  ])
+
+
+def test_iam_roles_only(plan_runner):
+  "Test folder resources with only iam roles passed."
+  _, resources = plan_runner(
+      FIXTURES_DIR, iam_roles='{folder-a = [ "roles/owner"]}')
+  assert len(resources) == 3
+
+
+def test_iam(plan_runner):
+  "Test folder resources with iam roles and members."
+  iam_roles = '{folder-a = ["roles/owner"], folder-b = ["roles/viewer"]}'
+  iam_members = '{folder-a = { "roles/owner" = ["user:a@b.com"] }}'
+  _, resources = plan_runner(
+      FIXTURES_DIR, iam_roles=iam_roles, iam_members=iam_members)
+  assert len(resources) == 4