**Exhibit 3.2****OPERATING AGREEMENT****OF****RED TRAIL ENERGY, LLC*****MEMBERS***     1.1 Place of Meetings. Each meeting of the members shall be held at the principalexecutive office of the Company or at such other place as may be designated by the Board ofGovernors or the President; provided, however, that any meeting called by or at the demand of amember or members shall be held in the county where the principal executive office of the companyis located.     1.2 Regular Meetings. Regular meetings of the members may be held on an annual orother more frequent basis as determined by the Board of Governors; provided, however, that if aregular meeting has not been held during the immediately preceding fifteen (15) months, a member ormembers owning five percent (5%) or more of the voting power of all membership interests entitledto vote, may demand a regular meeting of members by written demand given to the President orTreasurer of the Company. At each regular meeting the members entitled to vote shall electqualified successors for governors who serve for an indefinite term or whose terms have expired orare due to expire within six months after the date of the meeting and may transact any otherbusiness, provided, however, that no business with respect to which special notice is required bylaw shall be transacted unless such notice shall have been given.     1.3 Special Meetings. A special meeting of the members may be called for any purposeor purposes at any time by the President, by the Board of Governors or any two or more governors,or by one or more members owning not less than ten percent (10%) of the voting power of allmembership interests of the Company entitled to vote, who shall demand such special meeting bywritten notice given to the President of the Company specifying the purposes of such meeting.     1.4 Meeting Held Upon Member Demand. Within thirty (30) days after receipt of a demandby the President from any member or members entitled to call a meeting of the members, it shall bethe duty of the Board of Governors of the Company to cause a special or regular meeting of members,as the case may be, to be duly called and held on notice no later than ninety (90) days afterreceipt of such demand. If the Board fails to cause such a meeting to be called and held asrequired by the Section, the member or members making the demand may call the meeting by givingnotice as provided in Section 1.6 hereof at the expense of the Company.     1.5 Adjournments. Any meeting of the members may be adjourned from time to time toanother date, time and place. If any meeting of the members is so adjourned, no notice as to suchadjourned meeting need be given if the date, time and place at which the meeting will be reconvenedare announced at the time of adjournment.
Page 1 of  11

 
     1.6 Notice of Meetings. Unless otherwise required by law, written notice of eachmeeting of the members, stating the date, time and place and, in the case of a special meeting, thepurpose or purposes, shall be given at least ten (10) days and not more than fifty (50) days priorto the meeting to every owner of membership interests entitled to vote at such meeting except asspecified in Section 1.5 or as otherwise permitted by law. The business transacted at a specialmeeting of members is limited to the purposes stated in the notice of the meeting.     1.7 Waiver of Notice. A member may waive notice of the date, time, place and purposeor purposes of a meeting of members. A waiver of notice by a member entitled to notice is effectivewhether given before, or after the meeting, and whether given in writing, orally, or by attendance.Attendance by a member at a meeting is a waiver of notice of that meeting, unless the memberobjects at the beginning of the meeting to the transaction of business because the meeting is notlawfully called or convened, or objects before a vote on an item of business because the item maynot lawfully be considered at that meeting and does not participate in the consideration of theitem at that meeting.     1.8 Voting Rights. A member shall have voting power in proportion to the membershipunits owned, as provided in a member control agreement. Except as otherwise required by law, anowner entitled to vote may vote any portion of the membership units owned in any way the memberchooses. If a member votes without designating the proportion of the membership units voted in aparticular way, the member is deemed to have voted all of the membership units in that way.     1.9 Each member that is not a natural person shall designate in writing an authorized votingrepresentative to cast such Member’s vote. A Member may change the voting representative at anytime by written notice to the Company. Whenever this agreement allows for or requires Membersconsent to an action, the authorized voting representative of each member shall grant or withholdsuch consent on behalf of such Member. The voting representative shall represent the Member in allCompany business and shall be eligible to serve as a governor.     1.10 Proxies. A member may cast or authorize the casting of a vote by filing a writtenappointment of a proxy with a manager of the Company at or before the meeting at which theappointment is to be effective. The member may sign or authorize the written appointment bytelegram, cablegram or other means of electronic transmission setting forth or submitted withinformation sufficient to determine that the member authorized such transmission. Any copy,facsimile, telecommunication or other reproduction of the original of either the writing ortransmission may be used in lieu of the original provided that it is a complete and legiblereproduction of the entire original.     1.11 Quorum. The owners of a majority of the voting power of the membership interestsentitled to vote at a meeting of the members are a quorum for the transaction of business, unless alarger or smaller proportion is provided in the Articles of Organization of the Company or a membercontrol agreement. If a quorum is present when a duly called or held meeting is convened, themembers present may continue to transact business until adjournment, even though the withdrawal of
 Page 2 of  11

 
members originally present leaves less than the proportion otherwise required for a quorum.     1.12 Acts of Members. Except as otherwise required by law or specified in the Articlesof Organization of the Company or a member control agreement, the members shall take action by theaffirmative vote of the owners of the greater of (a) a majority of the voting power of themembership interests present and entitled to vote on that item of business or (b) a majority of thevoting power that would constitute a quorum for the transaction of business at a duly held meetingof members.     1.13 Action Without a Meeting. Any action required or permitted to be taken at ameeting of the members of the Company may be taken without a meeting by written action signed byall of the members entitled to vote on that action. Any action, if the Articles of Organization ora member control agreement so provide, may be taken by written action signed by the members who ownvoting power equal to the voting power that would be required to take the same action at a meetingof the members at which all members were required members, unless a different effective time isprovided in the written action. When written action is permitted to be taken by less than allmembers, all members shall be notified immediately of its text and effective date.**GOVERNORS**     2.1 Number; Qualifications. The permanent Board elected by the members at the firstannual meeting shall be comprised of seven (7) individuals. Governors shall be natural persons, andmust be Members (or Voting Representatives of entity members) of the Company. Prior to the firstannual meeting of members, the interim Board of Governors shall manage the Company.     2.2 Election; Term. The Members shall elect the governors at a regular meeting ofMembers. The procedural process for nominating and electing governors shall be determined inadvance of the meeting by the Board of Governors and shall be communicated to all Members in atimely manner. Each governor, other than the interim initial Board, shall hold office for a term ofthree (3) years; except that at the first annual meeting the governors shall be elected tostaggered one, two, and three year terms. Two of the Governors elected at the first meeting ofMembers shall be elected to a one year term, two for a two year term, and three for a three yearterm.     2.3 Vacancies. Vacancies on the Board of Governors resulting from the death,resignation, removal or disqualification of a governor may be filled by the affirmative vote of amajority of the remaining governors, even though less than a quorum. Vacancies on the Boardresulting from newly-created governorships may be filled by the affirmative vote of a majority ofthe governors serving at the time such governorships are created. Each person elected to fill avacancy shall hold office until a qualified successor is elected by the members at the next regularmeeting or at any special meeting duly called for that purpose.
Page 3 of  11

 
     2.4 Place of Meetings. Each meeting of the Board of Governors shall be held at theprincipal executive office of the Company or at such other place as may be designated from time totime by a majority of the governors or by the President. A meeting may be held by conference amongthe governors using any means of communication through which the governors may simultaneously heareach other during the conference.     2.5 Regular Meetings. Regular meetings of the Board of Governors shall be heldperiodically, as established by the Board, but not less than one per month.     2.6 Special Meetings. A special meeting of the Board of Governors may be called forany purpose or purposes at any time by the President or at least two (2) Governors by fixing theDate, time, and place of the meeting and causing notice of the meeting to be given. The noticemust state the purpose of the meeting.     2.7 Waiver of Notice; Previously Scheduled Meetings.          Subdivision 1. A governor of the Company may waive notice of the date, time, and place of ameeting of the Board. A waiver of notice by a governor entitled to notice is effective whethergiven before, at, or after the meeting, and whether given in writing, orally or by attendance.Attendance by a governor at a meeting is a waiver of notice of that meeting, unless the governorobjects at the beginning of the meeting to the transaction of business because the meeting is notlawfully called or convened and thereafter does not participate in the meeting.          Subdivision 2. If the day or date, time, and place of a Board meeting have been providedherein or announced at a previous meeting of the Board, no notice is required. Notice of anadjourned meeting need not be given other than by announcement at the meeting at which adjournmentis taken of the date, time and place at which the meeting will be reconvened.     2.8 Quorum. A majority of the governors currently holding office shall be necessary toconstitute a quorum for the transaction of business. In the absence of a quorum, a majority of thegovernors present may adjourn a meeting from time to time without further notice until a quorum ispresent. If a quorum is present when a duly called or held meeting is convened, the governorspresent may continue to transact business until adjournment, even though the withdrawal of a numberof the governors originally present leaves less than the proportion or number otherwise requiredfor a quorum.     2.9 Acts of Board. Except as otherwise required by law or specified in the Articles ofOrganization of the Company or a member control agreement, the Board shall take action by theaffirmative vote of a majority of the governors present at a duly held meeting.     2.10 Participation by Electronic Communications. A governor may participate in a Boardmeeting by any means of communication through which the governor, other governors so participatingand all governors physically present at the meeting may simultaneously hear each other
Page 4 of  11

 
during the meeting. A governor so participating shall be deemed present in person at the meeting.     2.11 Absent Governors. A governor of the Company may give advance written consent oropposition to a proposal to be acted on at a Board meeting. If the governor is not present at themeeting, consent or opposition to a proposal does not constitute presence for purposes ofdetermining the existence of a quorum, but consent or opposition shall be counted as a vote infavor of or against the proposal and shall be entered in the minutes or other record of action atthe meeting, if the proposal acted on at the meeting is substantially the same or has substantiallythe same effect as the proposal to which the governor has consented or objected.     2.12 Action Without a Meeting. Any action required or permitted to be taken at ameeting of the Members of the Company may be taken without a meeting by written action signed bythe number of Members who would be required to take the same action at a meeting of the Member atwhich all members were present. The written action is effective when signed by the required Membersunless a different effective time is provided in the written action. Notice of the text of suchwritten action must be given in advance to all Members.     2.13 Compensation. The Board of governors shall establish reasonable compensation ofall governors for services to the Company as governors, managers, or otherwise. By resolution bythe Board of Governors, the governors may be paid their expenses, if any, of attendance at eachmeeting of the Board of Governors and incurred in action on behalf of the Company.***MANAGERS***     3.1 Number and Designation. The Company shall have one or more natural personsexercising the functions of the position of President and Secretary/Treasurer. The Board ofGovernors may elect or appoint such other managers or agents as it deems necessary for theoperation and management of the Company, with such powers, rights, duties and responsibilities asmay be determined by the Board, each of whom shall have the powers, rights, duties andresponsibilities set forth in this Operating Agreement unless otherwise determined by the Board.Any of the positions or functions of those positions may be held by the same person.     3.2 President. Unless provided otherwise by a resolution adopted by the Board ofGovernors or in a member control agreement, the President (a) shall have general active managementof the business of the Company; (b) shall, when present, preside at all meetings of the members ofthe Board; (c) shall see that all orders and resolutions of the Board are carried into effect; (d)may maintain records of and certify proceedings of the Board and members; and (e) shall performsuch other duties as may from time to time be prescribed by the Board.     3.3 Treasurer. Unless provided otherwise by a resolution adopted by the Board ofGovernors or in a member control agreement, the Treasurer (a) shall keep accurate financial recordsfor the Company; (b) shall deposit all monies, drafts and checks in the name of and to the creditof the Company in such banks and depositories as the Board
Page 5 of  11

 
shall designate from time to time; (c) shall endorse for deposit all notes, checks and draftsreceived by the Company as ordered by the Board, making proper vouchers therefor (d) shall disburseCompany funds and issue checks and drafts in the name of the Company, as ordered by the Board; (e)shall render to the President and the Board, whenever requested, an account of all of suchmanager’s transactions as Treasurer and of the financial condition of the Company; and (f) shallperform such other duties as may be prescribed by the Board or the President from time to time.     3.4 Vice Presidents. The Board of Governors may establish the position ofVice-President. During the absence of disability of the President, it shall be the duty of theVice-President to perform the duties of the President. The Vice-President shall have such otherduties and authority as established by the Board.     3.5 Secretary. The Secretary shall attend all meetings of the Board of Governors andof the Members and shall maintain records of, and whenever necessary, certify all proceedings ofthe Board of Governors and of the Members. The Secretary shall keep the Require Records of thCompany, when so directed by the Board of Governors or other person or persons authorized to callsuch meetings, shall give or cause to be given notice of meetings of the Members and of meetings ofthe Board of Governors, and shall also perform such other duties and have such other powers as thePresident or the Board of Governors may prescribe from time to time.     3.6 Authority and Duties. In addition to the foregoing authority and duties, allmanagers of the Company shall respectively have such authority and perform such duties in themanagement of the business of the Company as may be designated from time to time by the Board ofGovernors or in this Agreement. Unless prohibited by a resolution approved by the affirmative voteof a majority of the governors present, a manager elected or appointed by the Board may, withoutthe approval of the board, delegate some or all of the duties and powers of a position to theCompany’s employees, accountants, and legal counsel.     3.7 Term.          Subdivision 1. All managers of the Company shall hold office until their respective successorsare chosen and have qualified or until their earlier death, resignation or removal.          Subdivision 2. A manager may resign at any time by giving written notice to the Company. Theresignation is effective without acceptance when the notice is given to the Company, unless a latereffective date is specified in the notice.          Subdivision 3. A manager may be removed at any time, with or without cause, by a resolutionapproved by the affirmative vote of a majority of the governors present at a duly held Boardmeeting, subject to the provisions of any member control agreement.          Subdivision 4. A vacancy in a position because of death, resignation, removal,disqualification or other cause may, or in the case of a vacancy in the position of President orTreasurer shall be billed for the unexpired portion of the term by the Board.
Page 6 of  11

 
     3.8 Salaries. The salaries of all managers of the Company shall be fixed by the Boardof Governors or by the President if authorized by the Board.***INDEMNIFICATION***     4.1 Indemnification. The Company shall indemnify its managers and governors for suchexpenses and liabilities, in such manner, unless such circumstances, and to such extent, as requireor permitted by North Dakota Statute, Section 10-32-99, as amended from time to time, or asrequired or permitted by other provisions of law.     4.2 Insurance. The Company may purchase and maintain insurance on behalf of any personin such person’s official capacity against any liability asserted against and incurred by suchperson in or arising from that capacity, whether or not the Company would otherwise be required toindemnify the person against the liability.**MEMBERSHIP INTERESTS**     5.1 Statement of Membership Interest. At the request of any member, the Company shallstate in writing, the particular membership interest owned by that member as of the moment theCompany makes the statement. The statement must describe the member’s rights to vote, to share inprofits and losses, and to share in distributions, as well as any assignment or the member’s rightsthen in effect.     5.2 Declaration of Distributions. The Board of Governors shall have the authority todeclare distributions upon the membership interests of the Company to the extent permitted by law.     5.3 Transfer of Membership Interests. Membership interests in the Company may betransferred only to the extent permitted by law and subject to any member control agreement.***MISCELLANEOUS***     6.1 Execution of Instruments.     Subdivision 1. All deeds, mortgages, bonds, checks, contracts and other instruments pertainingto the business and affairs of the Company shall be signed on behalf of the Company by thePresident or the Secretary/Treasurer as may be designated from time to time by the Board ofGovernors.          Subdivision 2. If a document must be executed by persons holding different positions orfunctions and one person holds such positions or exercises such functions, that person may executethe document in more than one capacity if the document indicates each such capacity.     6.2 Advances. The Company may, without a vote of the governors, advance money to itsgovernors, managers or employees to cover expenses that can reasonably be anticipated to beincurred by them in the performance of their duties and for which they would be entitled toreimbursement in the absence of an advance.
Page 7 of  11

 
     6.3 Company Seal. The Company will be a no seal company.     6.4 Fiscal Year. The fiscal year of the Company shall be determined by the Board ofGovernors.     6.5 Construction. This Operating Agreement is subject to the terms of any membercontrol agreement from time to time in effect and to the extent inconsistent, the member controlagreement shall be controlling.     6.6 Amendments. The Board of Governors shall have the power to adopt, amend or repealthe Operating Agreement of the Company, subject to the power of the members to change or repeal thesame, provided, however, that the Board shall not adopt, amend or repeal any Section fixing aquorum for meetings of members, prescribing procedures for removing governors or filling vacanciesin the Board, or fixing the number of governors or their classifications, qualifications, or termsof office, but may adopt or amend a Section that increases the number of governors.     IN WITNESS WHEREOF, the undersigned has executed this Agreement on the 24thday of September, 2003.
Page 8 of  11

 
**GOVERNORS:**