I believe the state should decide who should be sterilized.
Who is the state? Would you like Hillary Clinton to decide what to do with your reproductive organs? Barack Obama? Justin Trudeau? Angela Merkel?
A law-abiding citizen who works should generally be entitled to at least one child
Who is law-abiding? Does being convicted of blasphemy for saying that Islam is a pedophile religion make you not law-abiding? What about being convicted of misogyny for disagreeing with a feminist on Twitter?
unless he/she belongs to a dangerous religious sect.
Again, you give powerholders lucrative possibilities to get rid of competition by declaring them dangerous.
Im the case of people with hereditary illnesses their genes need to be edited before a child can be conceived.
This is an interesting one. What kinds of illnesses are we talking about? Is asperger's one of them? Scientists don't even know yet to what extent it is hereditary and, therefore, how to change it. And even if they did, there is no technology to do that right now.
If one wants more kids he/she has to meet conditions set by the state. For example bankers can be entitled to 5 kids and the President and his/her spouse 7.
The West is currently having issues with underpopulation, not the opposite. Such requirements would only make matters worse.